Oral Answers to Questions

BUSINESS, ENTERPRISE AND REGULATORY REFORM

The Secretary of State was asked—

Coal Mining

Paddy Tipping: When he last met representatives of the coal industry to discuss prospects for the deep coal mining industry.

Gareth Thomas: In the past year, Ministers have regularly met coal industry representatives to discuss a range of issues under the auspices of the coal forum, and they will continue to do so.

Paddy Tipping: The Minister might be aware that there has been discussion in the coal forum about an indicative figure for coal—a target figure for domestic coal of, say, 20 million tonnes per annum, split roughly between deep-mine coal and open-cast coal. What is his view on that? Does he support it?

Gareth Thomas: My hon. Friend gives me the opportunity to pay tribute to the work of the coal forum. We welcome the engagement of all the different coal industry stakeholders through the forum. I am aware of the discussions that my hon. Friend describes. Let me say that we recognise the continuing importance of coal, particularly to electricity generation in the UK. He might be aware that last year coal generated an average of nearly 40 per cent. of the UK's electricity, rising to 50 per cent. at peak prices. As he will know from the energy White Paper published last year, we continue to recognise the importance of coal. I am sure that my right hon. Friend the Minister for Energy will want to discuss my hon. Friend's point with him when he visits.

Stephen Crabb: Open and deep-cast coal production now barely meet a quarter of total UK demand, and the figure is dropping every year. Regardless of whether demand for coal increases or falls in the years ahead, the truth is that domestic production will continue to fall. Rather than getting caught up in discussions about how to slow the decline in domestic production, should not the Minister's focus be on what will happen to our coal-fired power plants, and on whether the development of carbon capture technology can be accelerated in time to create a new generation of clean coal-fired power stations? Such stations will help to protect us against an over-reliance on gas-fired generation.

Gareth Thomas: The hon. Gentleman rightly recognises the importance of carbon capture and storage. As a result, I am sure that he will welcome the announcement made in the pre-Budget report. We see considerable potential for carbon capture and storage and think that it has a significant contribution to make in helping us deal with the carbon dioxide issues that we face; it will also help our energy industry more generally.

Dennis Skinner: Is the Minister aware that most remaining privatised coal companies own vast acres of land around their pits? Is he further aware that in recent times some pits have been closed and vast sums made out of them as property? Many of us believe that pits are being shut to make money as property developments. Will the Minister keep a wary eye on the few remaining companies involved in the production of coal? It is important to exploit the huge deposits of coal underground, rather than being concerned about the land on top.

Gareth Thomas: I pay tribute to my hon. Friend's long-standing championing of the coal industry. We certainly continue to keep a wary eye on the prospects for the coal industry in the UK. One of the reasons we established the coal forum was precisely to enable ongoing discussions with all the different stakeholders in the coal industry, to understand the pressures on businesses and the attitudes of those who work in the industry, and to make sure that they are properly taken into account in our assessments of its future needs.

Michael Clapham: My hon. Friend the Minister will be aware that the crisis in energy is likely to come between 2012 and 2015, when we will see the simultaneous decommissioning of coal-fired stations and of some nuclear stations. It is therefore important that we ensure that the investment in new technologies is continued; there are, for example, integrated gasification combined cycle and carbon capture and storage projects. The Government are going to help with a demonstration plant, but we need more such plants if we are to ensure that such technology will be available to tackle climate change. If we are to tackle that problem, the transference of such technology has to be involved. Will the Minister ensure that we will be likely to see more than one demonstration plant for carbon capture and storage?

Gareth Thomas: My hon. Friend will know that we are working extremely hard not only on carbon capture and storage but on a variety of other low-carbon technologies. We are, for example, seeking a trebling of energy from renewable sources. We recognise coal's contribution to the energy mix, and through a variety of forums, not least the coal forum, we will continue to discuss the UK's future energy needs with all stakeholders.

Hydrogen

Paul Rowen: What funding and other support is available for those businesses working on the use of hydrogen as a fuel.

Gareth Thomas: Available funding includes a £15 million fund operated by my Department for hydrogen and fuel cell technology demonstrations. The Department also funded £6.5 million towards the establishment of a fuel cell and low-carbon vehicle technology centre of excellence based in Loughborough.

Paul Rowen: I am sure that the Minister is aware that the Governor of California visited this country recently, and that California has been a champion of the use of hydrogen fuel technology. Hydrogen is being used as a fuel throughout the state of California. What steps is the Minister taking to adopt some of its widespread availability?

Gareth Thomas: I heard something about the Governor of California coming to the UK, and I welcome the fact that he has championed not only the potential of hydrogen but further investment to reduce carbon dioxide emissions. We recognise the potential, which is why we set up the fund. I also welcome the initiatives such as those taken by the Mayor of London, who has committed to having 70 public transport vehicles powered by hydrogen sources. I know that the hon. Gentleman has an interest in this matter, and I am sure there will be many exchanges about the future of hydrogen. We recognise its potential, but it is still some way from fulfilling it because of research needs. I hope that the funding that we have committed will help to move the technology forward.

Andy Reed: My hon. Friend the Minister rightly mentions the institute at Loughborough, and we welcome the announcement of the energy technology institute and the £1 billion that it will bring, which will be focused on Loughborough. He talks about potential, but will he visit Intelligent Energy, a company that has a hydrogen fuel cell motorbike ready for production? We talk about potential, but what can his Department do to assist companies that are ready to produce the vehicles and fuel cell technology that will drive this country forward? We must not just talk about potential but ensure a marketplace for such vehicles.

Gareth Thomas: In principle, I am happy to come to Loughborough to meet my hon. Friend and see the company that he describes. In my original answer to the question of the hon. Member for Rochdale (Paul Rowen), I gave two examples of support that is available to move this new technology forward. There are a range of other sources to help us take it forward and I—or perhaps my right hon. Friend the Minister for Energy—look forward to meeting him to discuss those options.

Angela Watkinson: In Havering, BP conducted a very successful experiment in the use of liquid hydrogen fuel for single-decker buses that ended last year. The only trouble was that the buses had to come down from the east end of London to Havering, because that is where the fuel was. Does the Minister agree that it is not just a question of the viability of using a different fuel, but of its availability, in order to make experiments environmentally friendly and to encourage businesses to try them?

Gareth Thomas: I accept the hon. Lady's point. We need to get to a point where we expand the pilots, which is why I hope she will join me in welcoming the initiative of the Mayor of London to commit to 70 hydrogen-powered public transport vehicles by 2010. Such initiatives will help to move the technology from demonstration projects to reality.

Nuclear Power

Robert Goodwill: If he will make a statement on the progress of the consultation on the future of nuclear power.

John Hutton: The public consultation on the future of nuclear power in the United Kingdom closed yesterday.
	Over the past five months, we have consulted widely, seeking views from a broad range of interested parties on the information and arguments set out in our consultation document. We are now giving careful consideration to all the responses.

Robert Goodwill: We have already lost vital time because of the way in which the Government botched this consultation. Will the Minister assure us that he at least has the bottle to make a quick decision on this matter?

John Hutton: We need to make a quick decision; I can certainly agree with the hon. Gentleman to that extent.

David Chaytor: The latest figures from the Nuclear Decommissioning Authority reveal a 16 per cent. increase in the cost of decommissioning legacy waste, to £73 billion. Is my right hon. Friend confident that he can honour the Government's guarantee that there will be no future subsidy from the taxpayer for any new nuclear build, given that no one has the slightest idea about what the future decommissioning and waste management costs will be?

John Hutton: Yes, we are clear about that, and the arguments that support it were clearly set out in the nuclear consultation document. My hon. Friend raises a fundamentally important aspect that has come up repeatedly during the public consultation, but I believe that we have set out the right way forward. There will be no taxpayer subsidy and no hidden subsidies for new nuclear if Her Majesty's Government reach that decision. That is the right and sensible way to proceed.

Julie Kirkbride: As the hon. Member for Barnsley, West and Penistone (Mr. Clapham) said earlier, crunch time for domestically generated power in the United Kingdom is only five years away. Bearing in mind how long the Government have taken to make a decision about nuclear power and that it has to form part of the mix in future if we are to meet our climate change targets, how soon will there be a recommissioned nuclear power station that produces new nuclear energy in the UK?

John Hutton: I respect the hon. Lady's concerns, which are shared by all parties. She should, however, be careful about saying that her party has a monopoly of wisdom. I have been carefully studying the words of the hon. Member for Rutland and Melton (Alan Duncan), who appears to take three different positions on nuclear power. He was opposed to it, then it was a last resort and now he is apparently in favour of it. However, we shall shortly discover the position of the official Opposition.
	My hon. Friend the Under-Secretary set out in previous answers some of the measures that we are taking to deal with the hon. Lady's point. We are aware of the importance of getting on with the matter, and the Government are determined to do that.

Charles Hendry: The Secretary of State wills the end but not the means. Will he confirm that the Nuclear Decommissioning Authority has not been able to appoint contractors to decommission the old Magnox power stations because they are not interested in doing the work at the price that the Treasury is prepared to pay? Is it surprising that companies such as E.ON and EDF say that the window for new build nuclear is closing in this country, when the Government's dithering means that old stations are not being decommissioned, there is no clarity about the price of carbon and the Government cannot even set out the regime for nuclear waste disposal? Does not the greatest threat to our energy security come not from the Russians or the middle east, but from the Government's delays and inability to make the big decisions?

John Hutton: No. Again, I have a lot of respect for the hon. Gentleman, but his remarks are ridiculous. His point would be much more valid if there was any consistency or coherence behind his party's energy policy. When he supports our reforms to the planning arrangements, others will take his comments a little more seriously.

Postal Services

Andrew Robathan: What recent developments there have been in Government policy on the long-term future of sub-post offices; and if he will make a statement.

Patrick McFadden: On 17 May, following public consultation, my right hon. Friend the Secretary of State confirmed, subject to European state aid clearance, funding of up to £1.7 billion until 2011 to support the post office network and place it on a more stable footing.
	That Government funding includes a network subsidy of £150 million a year to support the network. Despite that subsidy, because of continued losses of around £4 million a week and a reduction of approximately 4 million a week in the number of people who use post offices, it is necessary, as the Secretary of State announced, to reduce the size of the network while maintaining national coverage. That process began last week and will continue in the next 15 months or so.

Andrew Robathan: Notwithstanding the subsidy of public money involved, that answer reveals a paucity of long-term policy and intellectual thought about how we can use that much-loved and much-needed facility, which all our constituents want. Will the Minister confirm that the 77 closures that were announced in the east midlands recently would not have been announced—the announcement would have been held back—if a general election had been called? Will he also confirm whether, when he announces the closures in Leicestershire and Rutland in November, there is any genuine chance of a consultation period that allows some of the closures not to happen? Or will they be enforced?

Patrick McFadden: The timing of the programme has nothing to do with general election timing.
	There is a balance to be struck between finishing the programme and the uncertainty that hangs over sub-postmasters and mistresses while it continues. We have set out our timetable to try to achieve that balance.

Russell Brown: I thank my hon. Friend for visiting my constituency last Thursday to see for himself exactly how rural services are being delivered through what was initially a pilot scheme two years ago. Would he care to share the experiences that he had last Thursday with the rest of the House?

Patrick McFadden: My hon. Friend is absolutely right. Alongside the difficult closures that are taking place, the Post Office is developing valuable outreach services. I had the pleasure of seeing them in his constituency last week, in the village of Twynholm, for example, where a member of staff from the neighbouring post office visits several days a week for several hours. The hours are well known to local people and the service has been up and running for two years. From talking to members of staff and the customers who use the service, I found that it was extremely popular. There are imaginative and creative ways in which the Post Office can provide services, particularly in rural areas where it might no longer be possible to sustain a full-time permanent post office.

Roger Gale: One of the Post Office's outreach services, to which the Minister just referred, is the possibility of home visits. When I suggested to the Post Office that it might like to make 3,500 home visits in my constituency, it seemed reluctant to do so. The loss of footfall arises largely from Government policy, which has removed business. Having closed rural post offices, we are now proposing to close urban post offices in some of the most deprived areas of the country, which will do immense social damage. Instead of ramming that proposal through, would the Government care to take it back and consider the proposals that the National Federation of Sub-Postmasters has made to develop proper businesses, so that instead of killing those small businesses we can allow them to grow?

Patrick McFadden: The hon. Gentleman refers to the National Federation of Sub-Postmasters, whose general secretary has said:
	"Although regrettable we believe that these closures are necessary to ensure the remaining post offices are able to thrive in the future."
	If the Opposition's policy is to reverse making available the payment of benefits into bank accounts, I should remind the hon. Gentleman of the cost. It costs the taxpayer 1p for a benefit or pension to be paid into a bank account. It costs 80p to make that payment through the Post Office card account and £1.80 to do so by girocheque. If the Opposition's policy is to reverse that, the cost would be about £200 million a year, which I am afraid we would have to add to the list of other uncosted spending promises that they have already compiled.

David Taylor: I declare an interest as a member of a multi-generation sub-post office family in the village where I live. Has the Minister had a chance to read the National Consumer Council report, "Post office closures 2002 to 2006", which was critical of the closures in that period? The post office closures that were announced then did not produce a strategic reshaping of the network; rather, they hit the poorest and most vulnerable members of society. The NCC does not believe that the 95 per cent. requirement for people in rural areas to be within three miles of a post office will be adequate to prevent that from happening again. Would the Minister care to comment on that?

Patrick McFadden: I have indeed read the report to which my hon. Friend refers. He is right that there are lessons to be learned from post office closures. The access criteria are important to ensure national coverage even after the change, which is why we are compensating the hard-working sub-postmasters and sub-postmistresses for their efforts. The process does the right thing by them, but also ensures that closures do not happen in an ad hoc way, on a first come, first serve basis that leaves holes in the network without trying to ensure national coverage.

Robert Smith: Does the Minister not recognise that, once closed, a post office is lost for ever to the community? Those vital services, which are so valued by the community, require the community's input, to ensure that no unnecessary closures are made and that decisions are not made that do the same damage as the urban reinvention programme did to the post office network in urban areas. Will he therefore extend the consultation period, once the Post Office has made its proposals, so that it can be meaningful for local communities and so that any mistakes made by the Post Office can be corrected?

Patrick McFadden: The hon. Gentleman asks about extending the consultation period. As I said a few moments ago, there is a balance to be struck in doing that and lifting the uncertainty from sub-postmasters around the country. That is why we have tried to strike the balance in the way we have.
	I have certainly encouraged Post Office Ltd to engage properly with local communities. Postwatch, the consumer voice, has a critical role to play in the consultations. Local authorities, too, have a critical role in engaging with Post Office Ltd and informing it of future regeneration plans and so on, so that plans can be made as best as possible. However, we cannot escape the fact that 4 million fewer people a week are using post offices, compared with a couple of years ago, and that the network is losing £4 million a week. We are committed to social network subsidy for the Post Office, and if that subsidy were not available, many more post offices would close. That is why we have committed £150 million a year to support the network.

Post Office Network

Andrew MacKay: If he will make a statement on the future of the Post Office and Royal Mail.

Mark Harper: If he will make a statement on the future of the Post Office and Royal Mail.

John Hutton: The Government are committed to securing a long-term viable future for Royal Mail and the post office network. To this end we have made substantial investment available both to support the modernisation of Royal Mail and to provide a comprehensive and accessible national network of post offices.

Andrew MacKay: How come it took until yesterday for the Prime Minister and the Secretary of State to condemn the Royal Mail strike? Could it have anything to do with the fact that, until the Prime Minister bottled at the weekend, he was expecting lots of funds from the Communication Workers Union to fight the election?

John Hutton: That is untrue. I have made it clear repeatedly since I have been in this job that the strikes should end. There has to be a sensible solution to this industrial dispute. My interest is to safeguard the investment that the taxpayer has made in this business and to ensure that the business can operate effectively in the liberalised market in which it operates. It is completely untrue to say that Ministers have been silent. We have made our views known on this matter repeatedly since the summer.

Mark Harper: The Secretary of State rubbishes the point made by my right hon. Friend, but over the past four years the CWU has made political contributions of £4.5 million, half of which has gone directly to the Labour party, with the rest being used for campaigning in the Government's favour. This presents the Secretary of State with a huge conflict of interest, given that the Government are the sole shareholder in Royal Mail and a recipient of funds from the principal union involved.

John Hutton: There is absolutely no conflict of interest of any kind whatsoever. I have made it clear repeatedly, as has my right hon. Friend the Prime Minister, that we will always speak up for the public and the taxpayer when it comes to the future of Royal Mail and the Post Office.

Geraldine Smith: I do not think that anyone could accuse the Government of doing the CWU any favours—

Alan Duncan: Are you a member?

Geraldine Smith: Yes, I am a member, and I am proud to be one.
	May I ask the Secretary of State why the Government are refusing to intervene in this dispute, which is costing Royal Mail millions of pounds and inflicting countless damage on hundreds, if not thousands, of other businesses across the country?

John Hutton: Let me explain to my hon. Friend that our role in this regard is to speak up for the public and for the taxpayer. We are not going to take sides in this dispute. That is our perspective, and I think that it is entirely proper that the management and the unions negotiate the terms and conditions for people in Royal Mail. I am not, for example, going to intervene to provide further funding to support a different offer to Royal Mail staff. We have given Royal Mail substantial investment, and it must operate within those investments and ensure that the taxpayer gets a return on them. I believe that the offer that has been made to Royal Mail staff is a decent and fair one, and I hope that this industrial dispute ends as quickly as possible.

John Grogan: Given that the Government intervened strongly and energetically to sort out the affairs of a private company, Northern Rock, is there not a case for following that example and adopting a more even-handed approach and acting as an honest broker in this dispute? Should not the Government intervene before breakfast, intervene before lunch and intervene before dinner—in the words of a former Secretary of State for Trade and Industry—to get a fair, just, negotiated settlement, not least in the interests of all the businesses that are suffering at the moment?

John Hutton: I agree that there must be a fair, just and negotiated settlement, which is what we believe should happen. I remind him and other hon. Members that in 2001 Parliament—with general consensus and with the agreement of both Royal Mail management and the trade unions—agreed that Royal Mail should operate with commercial freedom. I am not going to get involved in individual discussions on terms and conditions because I do not believe that it is appropriate for Ministers to do so. What I believe is appropriate is that this industrial action should end, as I agree that it is damaging businesses and inconveniencing the public.

Douglas Carswell: Is the Secretary of State aware of the real anger felt by people in my constituency, particularly in Walton, Kirby and Clacton, about the news that their post offices and sub-post offices might be closed? Is he aware that under these proposals post offices that are paying their way, on which many older people depend, could be shut?

John Hutton: As the Minister for Employment Relations and Postal Affairs has made clear, there is an obvious case for pressing ahead with these changes. The post office network must find a long-term and sustainable basis for going forward and it has to reflect changing customer preferences, which are visible to all of us in our constituencies. It is inconceivable that any sensible Government could follow the advice of the hon. Member for Rutland and Melton (Alan Duncan) and find up to another £1 billion to subsidise the post office network, which I understand is now his policy. That is simply not economically credible. It is a deep disappointment to me to see the Conservative party, which always used to clothe itself in respectability when it came to financial matters, now displaying utterly hopeless economics.

Gordon Banks: Will my right hon. Friend confirm whether the current management of Royal Mail has his full confidence in searching for a solution to the present dispute on how it delivers a secure and solid future for Royal Mail, its customers and its employees?

John Hutton: Yes.

Peter Luff: Does the Secretary of State understand that the questions that he has heard from his hon. Friends today only reinforce the growing view in the country that the Government need to use their authority—as the Government and sole shareholder in the Royal Mail Group—to intervene decisively in the dispute and bring it to an end? The dispute is causing huge damage not just to the Royal Mail Group, but to the whole social and economic fabric of the country. I therefore welcome the Secretary of State's preparedness to come before the Trade and Industry Committee next week—I hope that a date can be organised shortly—to answer questions on the dispute.

John Hutton: I always look forward to appearing before the hon. Gentleman's Select Committee and I am sure that this occasion will be no exception. We should bear one important fact in mind: fortunately, we live in a country where no Minister has the power to compel people to work or not to work. I therefore have limited powers in this case, which is obvious to everyone. Our job, I think, is to make it clear to the management and the unions where we believe the public interest lies in this matter. We have done that very clearly indeed.

David Drew: I hear what my right hon. Friend says, but it cannot be helpful when the chief executive of Royal Mail makes the comments that he has about his own work force. Postal workers are greatly depressed about the dispute and its possible outcome. It is outrageous that people who have given their lives to the organisation are now having imposed on them changes in terms and conditions of their work that would be completely unacceptable in other sectors. Is it not about time that the Secretary of State understood what postal workers are suffering and intervened?

John Hutton: I have had the very good fortune to discuss these issues with some of my own constituents who work for Royal Mail. I understand their concern about the future, which we all share. However, as I said in an earlier reply, it is important that we have a sensible, negotiated solution to the dispute, which I believe is perfectly possible. I have the greatest respect for staff who work in Royal Mail—we all do; we know what an important and highly valued job they do in our constituencies—but we must not lose sight of the important fact that if Royal Mail is going to succeed in the liberalised marketplace in which it now works, change is inevitable. We must facilitate a process of change, as the status quo is not sustainable. There will have to be changes inside Royal Mail if it is going to have the successful future that we all want it to have. I strongly believe that the best way to progress that is through a sensible agreement.

Charles Kennedy: The Secretary of State will appreciate that an area such as mine has been particularly hammered by the dispute, because of the absolute reliance on Royal Mail not just by individuals but businesses. In welcoming what the Prime Minister said yesterday, may I draw to the Secretary of State's attention the fact that the GP who administers the Small Isles medical practice has told me that people on those islands who have had blood tests cannot now get the results because the method of communication between the regional hospital and those islands is no longer in place? That is a desperately serious state of affairs. Even if the Government cannot intervene in the negotiations over the dispute, could they at least, in concert with the Scottish Executive, consider emergency provisions for people who are medically dependent on that service?

John Hutton: I am very grateful to the right hon. Gentleman for bringing that point to the attention of the House, and I will pursue it. We should not forget that in some cases, one of which he has highlighted, the industrial action could compromise a person's life. That is simply unacceptable.

David Kidney: The letters that MPs get from Royal Mail and the union all say that they want a modernised and more competitive business. If the management and the work force agree about where they want to be, cannot the Government, as the owner of the business, help them to agree how to get there?

John Hutton: That is very much what I want to do, and I want to try to make sure that that happens. I hope that there is still sufficient good will for the process to reach a sensible conclusion. Management and the trade unions are talking as we speak, and I hope that a way is found quickly—it must be quickly—to end this damaging dispute, which is compromising the investment that taxpayers have made in the Royal Mail, compromising businesses, inconveniencing the public and, in the worst case scenario, as the right hon. Member for Ross, Skye and Lochaber (Mr. Kennedy) said, threatening the health and well-being of individual citizens, which is unacceptable.

Alan Duncan: Is it not the case that 43 Labour Members have signed an early-day motion expressing implicit dismay at the Secretary of State's apparent indifference to the growing severity of the dispute? At last, today, we have heard rather more from him, which is welcome. The Government are the sole owner, the company must modernise or decay, and businesses up and down the country are being hurt. Given his answer to his hon. Friend the Member for Stafford (Mr. Kidney) that that is the way he wants to go, what further steps will he take to make it clear that union leaders are not acting in the interests of postal workers and that an immediate settlement is in everyone's interests?

John Hutton: We will continue to make that point. We have made the point clearly again to Royal Mail management, and this morning I had the opportunity to do so again to the general secretary of the Communication Workers Union. We do understand the severity and seriousness of the situation, we are behaving responsibly as the shareholder in Royal Mail, and we will do all that we can to bring the matter to a sensible conclusion. That must be done on the basis of terms that are acceptable to us as taxpayers and investors in Royal Mail. The Prime Minister set out clearly yesterday the terms on which the dispute should be settled.

Alan Duncan: Is not the cruel truth that in their weekly pay packet tomorrow 130,000 postal workers will receive only one day's pay? Will not their understandable fury at the sacrifice that they are making illustrate harshly that they are being seriously misled by backward-looking union leaders and that their future is best protected by supporting positive negotiations and a constructive plan for modernisation?

John Hutton: The dispute must have a sensible outcome, as I have made clear repeatedly. I will not get involved in the blame game as the hon. Gentleman has tried to do. It is essential that the dispute be now brought to an end, and the best and only sustainable way in which that can happen is a return to work on the basis of the offer that Royal Mail has made. If there are still points of detail that need to be discussed and debated—I understand that there are—those should be debated in a sensible fashion and not in a way that inconveniences the public as the industrial action is doing.

Lembit �pik: During my recent visit to Watford sorting office, organised by my colleague Sal Brinton, comments by management and staff indicated that structural restrictions prevent Royal Mail from competing on a level playing field within its own sector. Is the Secretary of State willing to meet me to discuss the underlying structural issues concerning employees and management of the Royal Mail, which may be contributing to the current industrial difficulties?

John Hutton: I should be happy to meet the hon. Gentleman, and any other Member who wants to raise those issues with me.
	The European Union has now agreed on a long-term framework for the future liberalisation of postal services, which is very welcome. There can be no turning back of the clock in relation to liberalisation in the United Kingdomthat would be a hugely retrograde stepbut we are always willing and ready to discuss with the Royal Mail unions, the hon. Gentleman and other Members any points of detail or concern that they may wish to raise, and I look forward to that.

Small Businesses

Philip Hollobone: What recent estimate his Department has made of the average number of hours a week spent by small businesses on the burden of administration and regulation.

Stephen Timms: My Department's annual small business survey showed that small and medium-sized enterprises typically spent three hours per week dealing with paperwork in compliance with Government regulations in 2005, down from four hours in the previous year.

Philip Hollobone: As an active supporter of the east Northamptonshire branch of the Federation of Small Businesses, may I draw the Minister's attention to a recent national FSB report which disputes the Government's findings? A survey of its members found that, on average, small businesses nationally are spending as much as seven hours a week filling in forms and complying with the needs of regulators. Will the Minister agree to meet representatives of the FSB and outline ways in which he can address their concerns?

Stephen Timms: I meet representatives of the FSB regularly, and I pay tribute to their work. The survey to which the hon. Gentleman referred involved a sample of 100 businesses; the one that I cited involved a sample of 8,000. FSB surveys conducted between 2000 and 2006 show quite a large reduction in the proportion of FSB members dissatisfied with the volume of legislation, and other evidence shows a fall in the number of businesses citing regulations as an obstacle to success. Nevertheless, there is no room for complacency. We need to go further. That is why we are committed to reducing the burden of regulation on businesses by 25 per cent. by 2010, and why the second round of departmental simplification plans will be published in December.

Rob Marris: May I remind my right hon. Friend that when I asked the hon. Member for Rutland and Melton (Alan Duncan) in the Chamber what regulations the Opposition would abolish he referred to only onethe provision for no smoking signs outside buildings? That was the only one that he could cite.
	The question of regulation is, however, a huge one. Will my right hon. Friend assure me that the thrust of the Government's approach to it will focus not on some bonfire of regulations, but on simplification of the regulations that we have? We have overlapping regulations that are excessively complicated. We need simplification, but we still need regulation.

Stephen Timms: My hon. Friend is absolutely right. There is, of course, a divergence of views among Conservative Members. The right hon. Member for Wokingham (Mr. Redwood) proposes a bonfire of regulations, apparently with the support of the shadow Chancellor, while the party leader calls for mandatory pay audits of companies.

Alan Duncan: That is not true.

Stephen Timms: My hon. Friend is absolutely right

Mr. Speaker: Order. The Minister must remember that it is his views that the House wants to hear.

Stephen Timms: My hon. Friend is absolutely right. That is why we are presenting the departmental simplification plans, the second round of which will be published in December.

Mark Prisk: I hope that the Minister will reflect on the incorrect statement that he has just made.
	Small firms are fed up with the loose words and empty promises of Ministers. Let me take the Minister back to six years ago, when the Government introduced regulatory reform orders. We were told then that they would reverse the regulatory tide, but what happened? In six years, Ministers have issued just 33 reform orders and enacted 18,000 more regulations. That is the truth about the effects of RROs.
	Given the dismal record of Ministers and their colleagues, may I ask the Minister for regulatory reform one straightforward question? How many regulations has his department scrapped in the last 12 months?

Stephen Timms: Let me remind the hon. Gentleman of the point that I made earlier. There is clear evidence that the proportion of businesses citing regulation as an obstacle to success has fallen significantly, from 21 per cent. in 2002 to 13 per cent. in 2005. Concern on the part of small businesses has fallen very sharply, reflecting the progress that we have made. However, we undoubtedly need to do more, which is why we are committed to a 25 per cent. reduction by 2010. Further details will be published in December. We have made very good progress, but there is more to come.

Energy Tariffs

Mark Lazarowicz: Whether he plans to bring forward proposals to promote the use of social tariffs by energy companies.

John Hutton: Following publication of the energy White Paper, we are working closely with Ofgem and energy suppliers to consider the right way forward.

Mark Lazarowicz: My right hon. Friend will be aware that the recent Ofgem report on social tariffs shows that energy suppliers' take-up of social tariffs varies widely. As he knows, there is widespread consensus among non-governmental organisations working on fuel poverty issues that there needs to be much wider use of social tariffs by energy suppliers. He may be aware that the all-party group that I chair recently produced a report on the issue. Will he agree to meet me and some of the organisations involved in the sector to discuss the way forward and to ensure that the consumer interest is represented in the discussions?

John Hutton: I would, of course, be willing to meet my hon. Friend and all hon. Members who were involved in what I thought was a very useful report. It is worth reminding ourselves that there are 2.5 million fewer households in fuel poverty today than there were 10 years ago. I assure him that we are looking closely at how we can deal with the price gap between direct debit and pre-payment meters. We are also looking at easier ways to help pre-payment customers to switch to cheaper supplies. A number of Britain's power companies are doing some excellent work in that area and we need to see how much more we can do.

Small Businesses

Henry Bellingham: When he next expects to meet representatives of the small firms sector to discuss employment regulations.

Patrick McFadden: The Department is in regular contact with the small firms sector. The sector is represented on the employment law simplification practitioner panel, which will meet my right hon. Friend the Secretary of State on 31 October. The Department's ministerial challenge panel, chaired by the Minister with responsibility for better regulation, which critically appraises the Department's regulatory and policy proposals, also has representation from the Federation of Small Businesses and the Small Business Forum.

Henry Bellingham: I am pleased to hear that, but does the Minister agree that the two biggest challenges facing small businesses are employment regulations and tax? Has he had a chance to look at yesterday's remarks by Lord Bilimoria, the founder of Cobra Beer and a key Labour supporter? He said that investment in small businesses and entrepreneurship has been penalised by the proposed 80 per cent. increase in capital gains tax, and that it sends all the wrong signals for Government support for small firms. What representations will the Minister make to the Chancellor about that anti-business measure?

Patrick McFadden: My advice to the Chancellor would be not to return to the days when the hon. Gentleman's party was in power and the tax was 40 per cent. Britain is still one of the best countries in the world in which to do business. That is backed up by the World Bank, and it is shown by our economic record over the past 10 years. I remind him that there are 500,000 more businesses in existence now than when his party was in power.

Lorely Burt: What consideration has been given to the risk management element with regard to removing regulations for small businesses: for example, no smoking signs that are required in one's own home when it is used for business purposes, and even in one's own car when it is used for business purposes?

Patrick McFadden: The hon. Lady makes the good point that we must always be alive to making regulations as simple as possible. I remind her that the Government have a very active programme on that. That is why we set a target to reduce administration burdens on business by 25 per cent. by 2010. It is why, around a year ago, a list was published which set out 500 simplification measures, saving businesses some 2 billion in administrative burdens costs. As my right hon. Friend the Minister for Competitiveness said, those simplification plans will be revisited shortly so that even more progress can be made on that agenda.

Patrick Cormack: Could the Minister now answer the question that the Minister for Competitiveness failed to answer and tell the House how many regulations have been withdrawn in the past 12 months?

Patrick McFadden: I have just given the hon. Gentleman some numbers. We published last December a list of 500 measures that would reduce admin burdens by some 2 billion for business as part of meeting the target to reduce admin burdens by 25 per cent. by 2010.

UK Competitiveness

James Duddridge: What measures he plans to take to improve UK competitiveness.

Stephen Timms: The key to continued long-term improvements in UK competitiveness and productivity will be maintaining the remarkable new stability that has characterised the British economy over the past decade. We will need to continue to build on that foundation, for example, as the Chancellor announced on Tuesday, with continued investment in higher education and skills, in infrastructure and in the science base.

James Duddridge: That statement does not match the facts. The Institute of Management and Development, which ranks international competitiveness, ranked Britain ninth in 1997. It now ranks Britain as 20th in its index. Who is to blame?

Stephen Timms: The most recent ranking that I have seen is the one referred to by the Minister for Employment Relations and Postal Affairs, my hon. Friend the Member for Wolverhampton, South-East (Mr. McFadden), from the World Bank. It ranks the UK sixth out of 178 countries. The latest global competition review ranks the Competition Commission joint first in the world. The new stability that we have secured is the key to that. We used to be the least stable country in the G7 on the inflation measure. Since 1997, we have been the most stable. That is the key to Britain's new prosperity and to the huge improvements in the economy over the past decadewe are determined to maintain that.

WOMEN AND EQUALITY

The Minister for Women and Equality was asked

Pensions

Anne Snelgrove: What policy appraisal the Government have undertaken of the impact of its pension proposals on women by 2020; and if she will make a statement.

Anne McIntosh: What discussions she has had with the Secretary of State for Work and Pensions on provision of pensions for women.

Harriet Harman: The Government have looked carefully at the implications for both men and women when developing our pensions reform proposals. An extensive gender impact assessment was published late last year alongside the Pensions Bill, now the Pensions Act 2007, which mainly focused on state pension reforms. Later this year the Government will present a further Bill with an emphasis on private pension reforms. We will be conducting a gender impact assessment for these proposals, which will be published alongside that Bill.

Anne Snelgrove: I am particularly concerned about the many women in my constituency and across the country who have been carers for elderly relatives or for children for many years. They find it unfair that their pension is reduced through this service that they have given not just to their families, but to the whole country. What reassurance can she give these women that they will not face a retirement of poverty?

Harriet Harman: It is a scandal that, despite the fact that women are caring for children and elderly relatives as well as going out to work, there is a 20 per cent. gap between their income in retirement and that of men. That is unfair, bearing in mind the fact that women are often older pensioners and live much longer. That is why we have taken action to deal with pensioner poverty, as most poor pensioners have been women. We are increasing access to the basic state pension and improving access to occupational pensions.

Anne McIntosh: I would welcome any proposals that would encourage more women to save for pensions. Does the right hon. and learned Lady think it is helpful for the Chancellor to do a smash and grab on the state second pension as this will discourage more women from investing in such a pension?

Harriet Harman: The important thing is for women to have the opportunity to work, as well as having enough time to care for their families. That is why the right to request flexible working and the right to maternity pay and leave have been important, allowing women to stay in the labour market and therefore still earn. When they are in the labour market, it is important that they have decent rates of pay, which is why we are determined to take further action to tackle unequal pay and the gender pay gap. We also need a pensions system that ensures that everybody has a decent income in retirement. The hon. Lady will know that our pension reforms must not only be simple, affordable and sustainable, but fair. We must tackle unfairness against women in terms of their income in retirement.

Theresa May: Has the right hon. and learned Lady assessed the impact on women of the latest 2 billion raid on pensions as a result of the Chancellor's pre-Budget report? As she said, fair wages and equal pay are important factors if we are to overcome female pensioner poverty. When the Leader of the Opposition and I launched our policy to combat the gender pay gap, the right hon. and learned Lady said that it was very interesting. As that pay gap is widening, has not the time come for action rather than just warm words? Given that the Government have taken our lead on inheritance tax, aviation tax and non-doms, will she now take our lead in this area and adopt our policy on equal pay?

Harriet Harman: As someone who has campaigned to push equal pay up the agenda for many yearsI have done so for decadesI think that it is important that we all work together to challenge the fact that women are not paid as much as men. The pay gap between women part-time workers and men full-time workers is 40 per cent. None of us can possibly accept that they are worth 40 per cent. less. I will look at any proposals the right hon. Lady brings forward. What is important is not whose idea a proposal is, but whether it is a good proposal that is fair and helps people.

Jo Swinson: More than 500,000 women over the age of 60 are missing out on a state pension unnecessarily. Paying just a few hundred pounds to fill in the gaps in their national insurance record could entitle them to thousands of pounds in backdated pension payments. What have the Government done to make sure that such women are aware that they could claim that money, and what more will the right hon. and learned Lady undertake to do to ensure that they do not miss out?

Harriet Harman: It is important that women who have not qualified for basic state pension contributions, either because they took time out of the world of work to care for their families or because they have been in low paid work below the national insurance threshold, know that if they have the money they can make up up to six years with additional voluntary contributions. We are concerned about the low take-up of that provision, and we intend to take further action on it. That provision is an attempt to remedy a past unfairness. What is important is that we have put in place structures that ensure that the unfairness that marked the old system is not in the current system. We need to make sure that people are rewarded for going out to work, but also that they are rewarded for staying at home and caring for their families.

Human Trafficking

Sharon Hodgson: What discussions she has had with ministerial colleagues on informing girls and women about the dangers of human trafficking.

Barbara Follett: I sit on the ministerial group that overseas the United Kingdom's action plan on human trafficking. That includes measures to inform women and girls about the dangers of this modern form of slavery. The messages contained in those measures have recently been reinforced by the public awareness campaign for Pentameter 2. As the problem also requires an international response, I raised it last week at a ministerial meeting with my European counterparts, and we will continue to support information projects in both source and transit countries.

Sharon Hodgson: I am pleased that the Minister agrees that this is a form of modern-day slave trade, which often forces women into prostitution. Does she have any plans to reform the prostitution laws by placing the burden of criminality on the demand side of this vile trade?

Barbara Follett: It is necessary for us to look at the demand side. Our prostitution strategy challenges the attitude that this trade in human bodies is inevitable and here to stay. The growth in human trafficking is fuelling this market, so we must look at the demand side of the problem. Ministersincluding Home Office Ministersare committed to doing what we can to ensure that the law is right in this respect and to considering how to make further progress on whether, and how, to criminalise such exploitation of vulnerable people.

Peter Bone: I welcome what the Minister said in her opening remarks, but does she agree that a more practical measure to stop this vile slavery would be to have better immigration controls for young women and children coming in from the European Union?

Barbara Follett: I congratulate the hon. Gentleman on the valuable work that he and his group do in this area, and I would welcome the chance to meet it to discuss the matter further. Identification is vital at this point, and we are working on that as part of the steps towards our ratification of the Council of Europe convention.

Fiona Mactaggart: Will the Minister convene discussions before the Criminal Justice and Immigration Bill completes its passage through the House to examine whether changes to it are necessary to tackle the extent to which prostitution is rife and is using trafficked women?

Barbara Follett: Although I understand what my hon. Friend is saying, we need to have a bit more debate and discussion. My right hon. and learned Friend the Minister and I held a round-table discussion on human trafficking this month, where we discussed with stakeholders the problems that they are facing. After we have had the debate and discussion, we can look at amendments, but we cannot do so at this stage.

Mental Health

Celia Barlow: What provision the Government have made for telephone-based services for women's mental health in 2007-08; and if she will make a statement.

Barbara Follett: Locally based primary care trusts are responsible for deciding what services best meet the needs of their communities. However the Government are investing in mental health helplines through a consortium of more than 50 organisations, many of them voluntary. These provide information and advice to all callers.
	In addition, the Department of Health's gender equality programme is helping to develop mental health care that is better suited to the needs of women service users. Yesterday, as my hon. Friend knows, my right hon. Friend the Secretary of State for Health announced additional investment to build a new psychological therapy service, and a great deal of that will be targeted towards women.

Celia Barlow: I thank my hon. Friend for her reply. As she may know, Sussex has Threshold, a women-only counselling service and national information line. Unfortunately, it is due to close next month because of a lack of funds. This service for women with mental health problems is very popular, so how soon will Sussex see the benefits of this new Government investment?

Barbara Follett: I commend my hon. Friend on the hard work that she has done in this respect in her area. The Brighton and Hove City primary care trust assures me that it is very supportive of women-only mental health services. The issue in this case is not about the lack of national health service funding, but about how mental health services are delivered to women in the area. That is why the trust is now working in partnership with Threshold to find another organisation to deliver these services, including the helpline.

Business of the House

Theresa May: May I ask the Leader of the House to give us the forthcoming business?

Harriet Harman: The business for the week commencing 15 October will be:
	Monday 15 OctoberRemaining stages of the Legal Services Bill  [Lords].
	Tuesday 16 OctoberA debate on defence policy on a motion for the Adjournment of the House.
	Wednesday 17 OctoberOpposition Day [20th Allotted Day] (First part). There will be a debate entitled Incompetent Government Handling of the Outbreaks of Foot and Mouth and Bluetongue Disease, followed by a debate on dealing with bullying in schools on a motion for the Adjournment of the House.
	Thursday 18 OctoberIf necessary, consideration of Lords amendments, followed by a debate on the review of the third sector on a motion for the Adjournment of the House.
	Friday 19 OctoberPrivate Members' Bills.
	The provisional business for the week commencing 22 October will include:
	Monday 22 OctoberRemaining stages of the Serious Crime Bill  [Lords]. Straight after the business statement, the Chancellor will come to the House to make a statement about Northern Rock.
	I look forward to answering hon. Members' questions today, but I just want to remind them that I am always available to talk to them in my room at the back of the Speaker's Chair.

Theresa May: I thank the right hon. and learned Lady for giving us the future business. Yesterday, the permanent secretary to the Ministry of Justice published an update of the Department's organisational review, in which the National Offender Management Service could be abolished, on the Ministry's website. Why is that important announcement being made by a civil servant and not by a Minister, and on the internet rather than to the House of Commons?
	On Monday the Leader of House said that she was the policewoman in the Cabinet, enforcing the Parliament first rule, whereby statements are made first to Parliament, not to the media. Will she make a statement to the House about why the Prime Minister went to Basra for a photo call, announced a troop withdrawal to the media before he came to Parliament and shamefully double-counted the number of troops coming home?
	The Prime Minister keeps boasting that he has dealt with the outbreak of foot and mouth, but as he crows, the livestock industry has lost 135 million, the EU export ban remains for much of the country and the official inquiry is reported to blame a Government facility for the outbreak. We will, as the Leader of the House has just announced, have a debate on this in Opposition time next week, but when the inquiries currently under way report, can we have full debates in Government time on the lessons to be learnt?
	On Tuesday the Chancellor of the Exchequer in his pre-Budget report proposed action on inheritance tax, on non-domiciles, on aviation tax and on the simplification of national insurance and PAYE. Where the Conservatives lead, this Government follow. Can we have, therefore, a debate on the protection of intellectual property rights?
	With this Chancellor, as with his predecessor, we always have to look at the small print. The new Chancellor said that his PBR included an affordable tax cut, but far from cutting taxes he is increasing taxes on families by 2,600 a year and there is a 2 billion raid on pensions. The inheritance tax threshold has not been doubled; the Chancellor is just taking credit for what half a million families already do. The Prime Minister's last Budget was a tax con, the Chancellor's first PBR is a tax con, so can we have a debate on the Government's tax cons?
	Incompetent, lacking in vision, with the same old spinthe Prime Minister is running scared of the people's verdict. Yesterday in Prime Minister's questions his excuse for not calling an election was that only 26 people had signed a Downing street petition calling for one. I checked the website this morning and there are now 4,408 signatures and rising. Can the Leader of the House arrange for the Prime Minister to give us an update on the petition every week in Prime Minister's questions?
	The Prime Minister is running scared of a general election and he is also running scared of a referendum on the renamed European constitution. That is despite the fact that the Labour Chairman of the Labour-dominated European Scrutiny Committee says:
	the red lines will not be sustainable...eventually all of the treaty will apply to the UK.
	Can we have a debate in Government time on the report of the European Scrutiny Committee?
	Finally, if the Prime Minister wants to prove that he is not a bottler, why does he not keep his word and give us the referendum that he promised?

Harriet Harman: We had the party political point scoring at Prime Minister's questions yesterday. Having had the Punch and Judy then, we can spare the House the Judy and Judy show today. This is a statement on the business of the House, and it will be business as usual.
	Turning to the points of business that the right hon. Lady raised, on the Ministry of Justice, there is an ongoing review. There has been no announcement.  [Interruption.] The announcement was of an ongoing review and it was notified on the website. If there are any proposals for change, we rightly would expect them to be notified to the House by the Secretary of State for Justice. There are no such proposals at present; the matter is simply under review.
	The right hon. Lady mentioned the Parliament first rule. We in this House all think it is very important indeed that if there is information that the House should hear first, that is exactly what happens. When the House is not sitting, obviously there is not the option of a statement to the House first. I agree with all hon. Members who think that information should be given to the House first. Indeed the Prime Minister came to the House and made a statement of further information about Iraq.
	In relation to foot and mouth and bluetongue, I agree with the right hon. Lady that farmers have had a difficult summer. The Secretary of State for Environment, Food and Rural Affairs came to the House on Monday and announced a package of support for hill farmers who are the most seriously affected. I note that the hon. Lady has made this the subject of her Opposition day debate. If there is any further information, it will be brought to the House. This is a serious problem. We need to identify the problems, contain them and eradicate the diseases which are so damaging.
	The right hon. Lady talked about the protection of intellectual property rights. I am sure that she can raise that subject with my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform.
	The right hon. Lady asked about tax. As she knows, my right hon. Friend the Chancellor will be answering Treasury questions next Thursday, and no doubt her hon. Friends can raise those questions then.
	The right hon. Lady mentioned issues relating to the EU reform treaty and European scrutiny. There will be public confidence in how we deal with issues proposed by Europe only if there are processes in the House that we all agree are working properly, and I do not think that that is the case. The point has been raised by a number of hon. Members on many occasions, including members of the Modernisation Committee, and we shall have to look into it further to make sure that we are doing the best we can in the House to scrutinise proposals from Europe.
	The right hon. Lady referred to how the House is dealing with the European reform treaty. She will know that if the Government reach an agreement on intergovernmental issues relating to Europe it will come to the House for ratification [Hon. Members: That's not a referendum.] Perhaps hon. Members will let me finish. It will come to the House. It is for hon. Members to decide the amendments that they want to table and it is for the Speaker to decide which amendments he accepts.

Mr. Speaker: I am glad that I have some say in these matters. I call Mr. Cawsey.

Ian Cawsey: Given the growth in the number of agency workers, will my right hon. and learned Friend find time for a debate on how the law protects agency workers? The welcome improvements that the Government have made through the minimum wage and employment rights need to apply fully to agency workers, not only so that some of the lowest paid people in our economy get all the benefits from their work but so that good agencies, which do the right thing, are not undercut by their less scrupulous competitors.

Harriet Harman: My hon. Friend raises an important issue that was also the subject of a private Member's Billthe Gangmasters (Licensing) Act 2004promoted by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan). We all agree that we need to do more to protect vulnerable migrant workers from exploitation, as well as those who have been working hard in this country for a long time, to ensure that their terms and conditions are not undermined and undercut by unscrupulous agencies. Consideration of what more we can do in relation to vulnerable workers will be raised with my hon. Friends at Question Time, but I will bring my hon. Friend's point to their attention.

Simon Hughes: I return to the Prime Minister's welcome statement in July that his new intention would be always to make statements on important issues to the House whenever appropriate, yet within three months we saw him go back to the bad old habit of making a statement that could absolutely have waited until Parliament came back this week. Will the Leader of the House go back to the Prime Minister and Ministers and make it clear that it is not acceptable that statements are made in the recess, willy-nilly, whatever the subject, when they could wait to be made in Parliament. That completely undermines what the Prime Minister said to the House after his election in the summer.
	On a similar issue, the Prime Minister indicated the intention to be open-mindedas the Leader of the House has always beenabout constitutional reform, which is very welcome. Given the little local difficulty that the Prime Minister got into last weekend, will the right hon. and learned Lady encourage him to let the House discuss the merits of fixed-term Parliaments, with a guarantee that people are on electoral registers and not off them, and possibly the idea that we hold elections on both days of the weekend to maximise turnout? I am sure that people throughout the country would welcome an unwhipped debate on that subject to test the view of the House.
	We heard a welcome statement from the Chancellor earlier this week on public sector borrowing and the comprehensive spending review, but there is to be no extended debate about that, as there usually is after the Budget. Will the Leader of the House suggest that in future we have a full, proper economic debate twice yearly, because then we could ask whether Labour was about to adopt our policy on long-term care funding for the elderly and test whether the flood defence moneys would be adequate or, as all the independent experts suggest, inadequate to meet the damage of recent months.
	Finally, rather than having to respond on Opposition days when subjects affecting agriculture and rural communities are put on the agenda or as a matter of urgency when there is a crisis, will the right hon. Lady provide regular opportunities to debate agriculture and the rural economy, not just after the latest outbreak of BSE or bluetongue disease? We must understand that unless we have a healthy agricultural industry which feels supported, the UK will face severe economic and financial difficulties?

Harriet Harman: We can all agree that when the House is sitting and a Minister has an announcement to make, that should be heard first in the House, not read about in the newspapers or heard on the Today programme. That is what is important. However, it is perfectly acceptable for the Prime Minister, as he did, to go to Basra and, when he is there, to answer questions about troop numbers.
	The hon. Member for North Southwark and Bermondsey (Simon Hughes) asked about the recall and dissolution of Parliament. The Modernisation Committee, which met yesterday, agreed that under the Governance of Britain proposals, we should examine the recall and dissolution of Parliament. Indeed, there will a Speaker's conference on a number of aspects of building public confidence in our democratic system. It is already possible under the law for voting to take place at weekends. That has been piloted in some areas and it is important that we continue to consider it.
	The hon. Gentleman spoke about the opportunities for discussing flood defences. I draw his attention to what the Chancellor said in the pre-Budget report about the increase in money for flood defences. We must not only tackle climate change and reduce carbon emissionsthe climate change Bill will be important for thatbut invest in adaptation to extreme weather conditions and protect people from floods. That was proposed in the pre-Budget report.
	The hon. Gentleman mentioned the importance of the House having topical debates. He is aware that the Modernisation Committee has made substantial proposals for topical questions to be asked without notice at Question Time, as in Prime Minister's Question Time, and for topical debates. I shall shortly present those proposals to the House.

Nigel Griffiths: Will my right hon. and learned Friend allow for an early debate on the disgraceful decision by the Liberal Democrat and Scottish nationalist-run council in Edinburgh to deprive thousands of senior citizens of essential home help services from Januaryservices such as ironing, cleaning and even fetching essential messages?

Harriet Harman: I know that my hon. Friend is extremely concerned about care and support for older people. Despite his criticisms of the provision of services by the local Liberal Democrat-Scottish National party council, he may be aware that the Government are undertaking a review of the support that we give to carers. I invite him to contribute to that review.

Greg Clark: Today's shaming report from the Healthcare Commission shows that 90 people died of c. difficile in Maidstone and Tunbridge Wells, and I am sure that the thoughts of all of us are with the families and friends of those who died in such tragic circumstances. Will the Secretary of State for Health come to the House to debate the lessons to be learnt from this tragedy? In particular, will he reassure my constituents and those of my hon. Friends that patient care will not be sacrificed to Government targets, be they financial or clinical, and specifically that nursing numbers will not be held back because of targets, and also that the new hospital, which will be 100 per cent. single-bedded rooms and therefore a bulwark against such infections in future, will not be jeopardised by any financial consequences from meeting the recommendations of the report?

Harriet Harman: Hospital-acquired infections, the subject of the report published this morning, have been an absolute tragedy and a scandal. Lessons must be learnt, not only in the three hospitals involved but more widely in the NHS. That is why yesterday the Secretary of State for Health said that he was announcing more investment in provision for isolation, so that when the disease is identified, the relevant patients can be isolated. He also said that there should be an annual deep clean in every hospital, improved cleaning throughout the year and extra screening. Currently, there is screening for planned admissions, but no comprehensive screening for such infectious diseases when people are brought in as a matter of emergency. Our health and social care Bill will strengthen the inspection regime; as the hon. Gentleman will know, that Bill is in the draft legislative programme.
	I want to mention a point about targets and patient care. I remember when we did not have targets on waiting lists, and constituents of mine used to die waiting for their heart operations. The targets are to ensure that patients get the health care that they need. The hon. Gentleman asked about new hospitals. He will have noticed that the pre-Budget report included additional investment in new hospital buildings. I conclude by saying that the Secretary of State for Health will give a further written statement on hospital-acquired infections early next week.

Nia Griffith: When will my right hon. and learned Friend make time available for a debate on the use of the House of Commons communications allowance during any election period? I ask that in the light of the Electoral Commission's ruling that Plaid Cymru must declare as election expenses the double-page adverts paid for out of its communications allowance. One was placed a week before the Assembly elections by the hon. Member for Carmarthen, East and Dinefwr (Adam Price) in the  Llanelli Star, a newspaper read by my constituents.

Mr. Speaker: Order. Did the hon. Lady notify the hon. Gentleman

David Taylor: Yes.

Mr. Speaker: Order. The hon. Lady should be allowed to answer; I do not need two people to do so. It is best not to use business questions to attack an hon. Member. That is not their purpose; we are discussing next week's business.

Harriet Harman: rose

Mr. Speaker: I would rather leave the matter.

Nicholas Winterton: If the Leader of the House had been here earlier, she would have heard a protracted exchange about the problems of our postal services and the current industrial action. I should say that, as a Conservative, I am sympathetic to the postal workers' position, albeit perhaps not to their leadership. I believe in the universal daily service and that the postal service is essential to the social fabric of this country. Given that there is such protracted industrial action in a national service, should there not be a debate in this House, so that every Member can express a view? Although I believe that managers of postal services need to make their own decisions, this House and the Government should take an interest in matters that in some cases can affect the lives of individuals.

Harriet Harman: I am aware that the House had an opportunity for protracted discussion during Business, Enterprise and Regulatory Reform questions this morning. I strongly agree that we all respect the work done by the Post Office work force. We all support the universal daily service. We recognise the huge challenges that have faced the Post Office, first, with the advent of the fax and then with the advent of e-mail, which have transformed the situation in which the Post Office works.
	I agree that the strike has been damaging, not only to the Post Office but to businesses that depend on it and ordinary members of the public wanting to use postal services. The Prime Minister has made it absolutely clear, as did the Secretary of State this morning, that in view of the fact that a perfectly decent offer has been made, we want the dispute to end. The industrial action is not justified, as the Secretary of State said.

Martin Linton: May we have a debateor, better still, a Bill in the Queen's Speechto close the loophole that allows candidates to spend unlimited amounts of money until four weeks before an election? I am sure that my right hon. and learned Friend is as alarmed as I am by the sight of Lord Ashcroft roaming the country signing cheques for 25,000 at the drop of a business plan, for the few candidates who win his approval. Does that not smell of the Victorian era, when landowners controlled strings of rotten boroughs and could spend money to ensure that their candidates were elected?

Harriet Harman: My hon. Friend raises an important point. All in the House are concerned that there should be full confidence in the House and in our democracy. We should all be concerned that people do not like the idea that big money comes in and assists people in buying seats. That has been pervasive in the United States and has undermined public confidence. This arms race, in which all sides have been spending more and more on elections, has simply been correlated with a fall in turnout. The public are turned off [Interruption.]

Mr. Speaker: Order. The right hon. Member for Bracknell (Mr. Mackay) must let the right hon. and learned Lady speak. She is answering business questions.

Simon Burns: Will the Leader of the House arrange for the Department of Health to carry out an urgent inquiry and make a statement next week about how it sometimes answers priority written questions? Can the Department please look into the fact that when I asked an unhelpful question in September about how many scouts at the world jamboree attended Broomfield hospital to be treated and how many were asked to pay for their treatment, the Minister concerned responded by hiding behind the fact that the Department does not collect such information centrally? When I rang up the Minister's private office to complain that that response seemed to be blocking, people there helpfully considered the issue again. Ten days later, they sent me an e-mail saying that they had checked with the East of England strategic health authority and Mid-Essex hospital trust and that they were unaware that anybody from the jamboree had been treated. Last night, I received a response to my freedom of information application, which told me that 107 scouts had been treated for 173 medical complaints and that 53 of them were not eligible for free NHS treatment. I also learnt that not one had yet been sent an invoice, even though they have all returned to different parts of the world

Mr. Speaker: Order. We all have a high regard for the scout movement, but perhaps an Adjournment debate on the issue would be appreciated.

Harriet Harman: The hon. Gentleman raises an important point about questions. Questions tabled by hon. Members to Government Ministers about issues of public concern or of concern in their constituencies are all helpful, so we should back Members up in asking them.
	All answers should be prompt, full and completely accurate. Members should not have to resort to freedom of information requests. If a mistake is madehonest mistakes will sometimes be made and misinformation given in a parliamentary answerthe Department itself should ensure that the answer is corrected and sent directly to the Member concerned. We also need to make arrangements to ensure that corrections are printed in  Hansard. At the moment, the relevant Member can be invited to retable the question, but that is a bit clumsy. We are thinking about whether to have a corrections page at the end of  Hansard, so that people can see when information has been wrong. I do not want us to seem like  The Guardian, but when Government Departments get things wrong, they should correct them; it should not be necessary to make freedom of information requests. As soon as an hon. Member has tabled a question, they should be confident that it will be answered accurately.

Kerry McCarthy: On Monday, the House debated the Second Reading of the Criminal Justice and Immigration Bill. As two Government statements were made beforehand, the main debate did not start until 5.39 pm. Back Benchers did not have a chance to make their speeches until two hours later; that meant that some of us got to speak for only five minutes or less. What does my right hon. and learned Friend plan to do to take forward the Modernisation Committee's recommendation that there should be limits on Front-Bench contributions during such debates?

Harriet Harman: That is a matter of concern to Back Benchers in all parties and, if I might be so bold, it has been a matter of concern to you, Mr. Speaker, as well. As my hon. Friend said, the Modernisation Committee has introduced proposals that the Government will bring forward for debate shortly. Front-Bench spokesmen need long enough to get their argument across, but not so long that Back Benchers do not have an opportunity to intervene or to make their own speeches.

Nigel Dodds: I urge the Leader of the House to allow time for a debate on the report of the European Scrutiny Committee. I draw her attention to the fact that just last week the Northern Ireland Executive and the Northern Ireland Assembly agreed unanimously that there should be a referendum on the European treaty. I urge her to accede to the growing clamour and demand throughout the country for a referendum. Does she accept that the Government have lost the argument on that, and will the Government allow the people finally to have their say, as they promised they would?

Harriet Harman: All of us who believe that our membership of the European Union is vital for the health of our economy, our work tackling climate change, our commitment to international development and the tackling of crime, which of course knows no boundaries, think that we could make the argument in favour of Europe much more strongly.
	As for the European Scrutiny Committee, and how we deal with the ratification of the treaty, the hon. Gentleman is a Member of this House, and if the Government introduce proposals for the House to ratify the treaty, it will be down to hon. Members whether they table amendments or not. The selection of amendments will be a matter for Mr. Speaker, and it will be a matter for this House to vote on them. The point is that the British people should be reassured that no legislation is simply imposed on this country; it is a matter for this House.

Kate Hoey: Following on from the point of the hon. Member for Macclesfield (Sir Nicholas Winterton), does the Leader of the House not think that the public will find it absolutely disgraceful that we are not having a debate on the Royal Mail dispute, so that we can put forward some of the views that are not being put forward by Adam Crozier, on his 1.3 million salary, about the deterioration of services for the public that will take place as a result of the planned changes, such as later deliveries, no Sunday collections and a cut in the pensions of our hard working postmen and women? That case has to be put in the House because our loyal postmen and women are being done down very badly by the fact that the Government are not directly intervening.

Harriet Harman: Although the Post Office runs along commercial lines, this is a matter of public interest. My hon. Friend has raised some very important points and I will bring them and those made by the hon. Member for Macclesfield (Sir Nicholas Winterton) to the attention of my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform.

Roger Williams: On Monday, the Secretary of State for Environment, Food and Rural Affairs came to the House and made a statement on compensation for foot and mouth. Yesterday, my hon. Friend the Member for Ceredigion (Mark Williams) asked the Under-Secretary of State for Wales whether the Assembly in Cardiff was going to be fully refunded for any cost. Overnight, there has been some discussion as to whether that contribution by the Department for Environment, Food and Rural Affairs was withdrawn when it became clear that a general election was not going to go ahead. This is a terrible state to be in. Will the Leader of the House ensure that the Secretary of State for Environment, Food and Rural Affairs comes to the House and clarifies the situation?

Harriet Harman: The Secretary of State is well aware of the terrible difficulties that foot and mouth and bluetongue have caused, particularly the effect on hill farmers, of whom there are many in Wales. Of course, the hon. Gentleman will know that this is a devolved matter[Hon. Members: No, it is not. It is reserved.] The devolved Assemblies have formed their own package of compensation[Hon. Members: It is reserved.] I will undertake to look into that matter.

Dan Norris: May we have an early debate into the running of price-comparison websites for goods and services? There is a growing concern that those sites for consumers do not always offer the best deal because they hide the payments that they are making to various companies, and they do not necessarily include the whole range of goods and services available. Some people have called for a code of conduct; I am not sure whether that is the right way forward, but I feel that regulation of some kind is needed to ensure the best possible deal for consumers on the web.

Harriet Harman: My hon. Friend makes an important point. Consumers need to know whether the information that they are looking at is genuinely impartial and fair advice that will help them when they spend their money on goods and services. I will bring his comments to the attention of my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform.

George Young: As my party is now setting the agenda for Parliament, would it not save time if the business statement were made by my right hon. Friend the Member for Maidenhead (Mrs. May)? In the meantime, if that is not possible, may I press the Leader of the House for a reply to a question she was asked but did not answer? On Tuesday, the Chancellor of the Exchequer made a statement on the pre-Budget report and the comprehensive spending review, setting the financial and political priorities of the Government for the next three years. Surely that statement should be tested in the House of Commons, in an early debate in Government time.

Nicholas Winterton: Now, resist the temptation.

Harriet Harman: I will draw that point, and those made in support of it by other hon. Members, to the attention of the Chancellor, and we will consider it.

Chris Ruane: Will my right hon. and learned Friend give time for a debate on the proper implementation of the Electoral Administration Act 2006? As the Minister responsible for piloting that Act during the first half of its journey through Parliament, she will be aware that one of its key elements was door-to-door canvassing to increase voter registration. Advice given by the Electoral Commission to electoral registration officers in June said that that was not necessary. This matter needs to be fully discussed in Parliament.

Harriet Harman: My hon. Friend raises an extremely important point. He has been a champion of ensuring that everyone who is entitled to vote is on the electoral register, so that they get their vote. It is of particular concern to him that those least likely to be on the electoral register are those who live in inner cities, poorer people, younger people, those in rented accommodation and black and Asian people. We cannot have an unequal democracy and, therefore, the electoral register is an important part of democracy, which underpins this House and its legitimacy. I will raise the point about the recommendation against door-to-door canvassing; that was not the intention of the House when we passed the Act. I will get my right hon. Friend the Secretary of State for Justice to write to him, and place a copy of the letter in the House of Commons Library.

David Howarth: May we have a debate on the effective use of resources in the health service? I have been trying to discover what lies behind proposals to close Brookfields hospital in my constituency and I have found out that vast amounts of public money are lying unspent in the accounts of strategic health authorities: 960 million last year and a predicted 660 million this year. Surely it makes no sense whatsoever to close hospitals in one part of the country while vast amounts of public money are unspent in other parts.

Harriet Harman: If the hon. Gentleman wants a response from Health Ministers, and the opportunity to debate and air the issues he has raised, he might consider that a very appropriate subject for a debate in Westminster Hall.

Jim Devine: May we have a debate in Government time about the lessons learned from the collapse of Farepak, the Christmas saving company, which happened this week last year? We now know that the Halifax Bank of Scotland and Farepak management met in February of last year because the company was in dire financial straits, but it kept taking money off agents until last October. Does my right hon. and learned Friend agree that the minutes of that meeting should be put into the public domain so that the hundreds of thousands of decent, hard-working families can finally learn where their money went?

Harriet Harman: First, I pay tribute to the work that my hon. Friend has done on exposing the scandal of Farepak, alongside that of my hon. Friend the Member for South Swindon (Anne Snelgrove). It is a very important issue, and it has led to a tougher regulatory regime to ensure that something similar does not happen in the future. As he says, there are still lessons for those individuals to learn from what happened to Farepak. As he knows, an investigation is being carried out under the powers of the Companies Act. When such an investigation is being carried out, there are technical and complex rules about what is available for publication and what has to remain confidential. We want to be sure that everything that can be published is published, because it is a matter of public interest. I will ask the relevant Minister to ensure that that does happen, and that he writes to hon. Members concerned and places a copy of the letter in the House of Commons Library.

Michael Spicer: What has happened to the Senior Salaries Review Body's report on Members' salaries, which the Government received before the recess?

Harriet Harman: The report has been delivered and the Government are considering it. We will publish it, along with our recommendations, and the House will have an opportunity to debate it shortly.

Linda Gilroy: Many people in other parts of the country will be worried about the hospital infection stories emerging from Tunbridge Wells today. I am therefore pleased that there will be a statement. However, will my right hon. and learned Friend encourage her colleagues in the Department of Health to go further and seek positive opportunities to debate what works in controlling hospital infections? For example, Plymouth Hospitals NHS Trust, based in Derriford hospital, has one of the lowest infection rates in the country and also manages to fulfil other targets.

Harriet Harman: I join my hon. Friend in paying tribute to her local hospital. It is important to listen to clinicians and others who work in the health service about the way in which we tackle hospital-acquired infection. It is important that we understand the science of hospital-acquired infection and that we listen to patients, who, with their visitors, are the first to complain about dirty facilities in hospitals. The additional use of antibiotics has meant a growing difficulty with tackling hospital-acquired infection once it has taken root. However, I remember complaining that I was not allowed to spend long enough in hospital when I was having my first babyone was tipped out after a week; it is now 24 hoursand my father, as a doctor, said, You want to spend as little time as possible in hospital because hospitals always carry a risk of infection. We are not considering anything new, but the position has become much graver.

Nigel Evans: As the Leader of the House knows, I had a debate on the EU constitutional treaty referendum in Westminster Hall, where I received a pretty inadequate response from the Minister for Europe. Perhaps we could have a full day's debate on the subject. One of the reasons that the Prime Minister gave for bottling out of a general election was that polls showed that few people required one. However, poll after poll shows that the vast majoritythree quarters of the people of this countrywant a referendum on the EU constitutional treaty. May we please have a debate on that?

Harriet Harman: I refer the hon. Gentleman to my previous comments on that subject.

David Chaytor: I have friends and relatives who work for Royal Mail as postal workers and on the management side. I am therefore under no illusions about the complexity of the issues involved or the difficulty of the negotiations. Although we had a brief discussion of the matter on a single question earlier this morning, my right hon. and learned Friend must know that it is potentially the most serious industrial dispute of the past 10 years and possibly the past 22 years. On next week's agenda, we have three Adjournment debates on issues that cannot be considered remotely topical. In view of my right hon. and learned Friend's express support earlier for more topical questions and debates, will she reconsider the future business so that we can have a debate on the dispute at Royal Mail on the Floor of the House?

Harriet Harman: My hon. Friend is right that no one doubts the seriousness of the effect of the dispute on those who work in the Post Office, the Post Office as a whole and those who use it. I shall draw his comments to the attention of my fellow Ministers.

Andrew MacKay: Returning to the Leader of the House's welcome to the Parliament first initiative, and given that she inadvertently misled the House when she answered a question from the hon. Member for North Southwark and Bermondsey (Simon Hughes), may I invite her to confirm that the Prime Minister was not answering casual questions in Basra, but holding a formal press conference to announce troop reductions? Will she also confirm the number of days that elapsed between that press conference and the return of the House on Monday?

Harriet Harman: I would simply confirm to hon. Members that I agree that announcements should be made to the House first. However, I also expect hon. Members to understand that, if the House is not sitting, that does not mean that Ministers cannot make announcements, and that they will continue to be made in the recess. I shall focus on ensuring that, when the House is sitting, information is given to the House first.

Jim Sheridan: Regardless of the way in which the statement was made, thousands of service personnelmen and womenwill return to their families from Iraq in the near future. May I ask my right hon. and learned Friend to use her good offices to encourage local authorities and communities to recognise the work of the service personnel when they return, not jingoistically but in a way that acknowledges their valuable contribution to the safety and security of this country?

Harriet Harman: I absolutely agree with my hon. Friend's important point. The Secretary of State for Defence believes that it is important that we recognise the work of the armed forces and I will draw his attention to my hon. Friend's comments.

Mark Hunter: Will the Leader of the House consider making time available for an urgent debate on the worryingly high levels of personal debt, especially among students and graduates, which threatens to undermine future economic stability? Does she agree that such a debate would be especially pertinent in view of the widely differing predictions in the Government's pre-Budget spending review, which the independent assessors published this week?

Harriet Harman: The Government are concerned to protect people against unwise borrowing, which they are at risk of being unable to repay. However, I refer the hon. Gentleman to the statements of my right hon. Friend the Chancellor about his confidence in future economic stability.

David Taylor: There are persistent rumours in this place about an early prorogation, so there must be plenty of vacant slots into which debates can be inserted. Will the Leader of the House arrange a debate on a topic of concern to 15,000 people in my constituency, and, indeed, people in every constituency: the 9 million people who suffer from some form of arthritis, such as rheumatoid arthritis or osteoarthritis? Tomorrow is world arthritis day and it would be appropriate for a Minister in this place to make a statement next week on the steps that the Government are taking to tackle the problems that are associated with the distressing condition, which affects not only elderly people but those across the spectrum of society.

Harriet Harman: My hon. Friend makes an important point, which I shall draw to the attention of my colleagues in the Department of Health. It may well be right to issue a written ministerial statement on national arthritis day.

Patrick Cormack: May we have a clear, unequivocal statement next week on what is and is not allowed in Parliament square? The right hon. and learned Lady knows that her predecessor, the right hon. Member for Neath (Mr. Hain), informed the House and the Commissionas you will remember, Mr. Speakerthat the legislation that was passed would deal with the eyesores in Parliament square. Yet we now have more of an eyesore than ever.

Harriet Harman: What is or is not allowed in Parliament square is a matter for the law that has been passed by the House and its independent enforcement by the police and the Crown Prosecution Service. If the hon. Gentleman believes that we should change the law, he should present proposals. The issue is raised in the Green Paper entitled The Governance of Britain, to which he could respond.

Alistair Carmichael: If the Leader of the House is having difficulty with the constitutional position on foot and mouth compensation, may I commend to her a concisesome might say elegantstatement of the law contained in my point of order at column 416 of yesterday's  Hansard?
	Will the Leader of the House ensure that, when we have the debate in Opposition time, the Secretary of State for Environment, Food and Rural Affairs will lead for the Government? On Monday, he gave the House the impression that he had no responsibility for Scotland. That is wrong and an error that is making the important topic a political football for the Scottish National party in Edinburgh. The farmers and crofters in my constituency and throughout Scotland need answers before the economic and animal welfare crisis reaches a peak.

Harriet Harman: We would all agree that all Departments, Government agencies, local government and the devolved Administrations should work to get the best possible deal to support farmers in that difficult situation and avoid its becoming what the hon. Gentleman describes as a party political football. He is right that there will be a debate next week. I am sure that the Secretary of State will be able to respond in the necessary way.

John Redwood: Does the Leader of the House think that it gives a good impression of this place if all the good ideas for debates and statements from Back Benchers in all parts of the House are turned down, so that the House can plan another holiday, shortly after a 10-week recess? Is the image of the House further enhanced by the proposal that MPs should be able to take precedence over other people in queues?

Harriet Harman: The right hon. Gentleman raises two points. The first is about the availability of time for hon. Members to get topical debates. As he will know, members of the Modernisation Committee under the previous Leader of the House made some proposals, which will be brought forward, that will enable Back Benchers to have more topical questions and topical debates.
	The right hon. Gentleman also raised the question of hon. Members and others who use the Palace of Westminster's facilities. I understand that it was the existing rules that were reissued. We would all agree that when it comes to running for a vote it is important that the lifts should be available to hon. Members. However, in the 21st century, if two human beings are standing next to each other queuing for a sandwich or cup of coffee, it cannot possibly be right that because one of those people is a Member of Parliament, they go first.

Financial Market Instability

Alistair Darling: With permission, Mr. Speaker, I should like to make a statement on Northern Rock plc. Before I start, however, I draw the House's attention to the fact that I have informed both the Register of Members' Interests and the Treasury's permanent secretary that, like many others, my wife and I have a mortgage with Northern Rock, but no savings or deposits.
	As I said in my written statement on Monday, Northern Rock got into difficulty following the problems triggered in the US mortgage market, which have gone on to affect the financial markets in countries all around the world. In early August, when the markets realised the extent of the problems in the US sub-prime market, they also began to have doubts about the value of other asset-backed securities. Uncertainty over which institutions were exposed and to what extent meant that institutions lent to each other at much higher rates, and in some cases stopped lending to each other altogether. The result was a large reduction of money in the market generally and an increase in the cost of borrowing, not just for those with exposure to the sub-prime market, but for all institutions.
	Those developments have had a global impact, affecting major US mortgage lenders, a major French bank and banks in Germany. The availability of credit has increased over the past few weeks, so we can be more confident, but we cannot be certain when the current instability will end. Britain entered the global turbulence with a stable economy and a strong banking sector, which has experienced rapid growth, with well capitalised balance sheets. British institutions have less direct exposure to sub-prime assets and our sub-prime market share5 per cent.is much lower than that of the US. However, because of its business model, Northern Rock faced a particular problem. It has a large share of Britain's mortgages, but they are primarily financed through the wholesale markets, including a significant proportion from securitisation. That meant that Northern Rock was particularly vulnerable to the virtual closing of that market over the summer.
	On 14 August, the Financial Services Authority told the Bank of England and the Treasury about its concerns about Northern Rock and its vulnerability in the current market circumstances. During August it became increasingly clear that Northern Rock was having difficulty getting access to the financing that it needed and that the cost of doing so was increasing. The general situation and Northern Rock's position in particular were monitored on a daily basis. On 5 September, the Bank announced 4 billion of extra support to provide increased liquidity to the wider market. As Northern Rock's position deteriorated, it became clear that specific support was likely to be needed for it. On 13 September the Governor and the chairman of the FSA recommended that I authorise the Bank to provide special liquidity support. I agreed because I believed that that was justified.
	There are clear principles governing such support, which are set out in the memorandum of understanding between the Treasury, the Bank and the FSA that was first signed in 1997. Such support should be undertaken only when there is a genuine threat to the stability of the financial system and in order to avoid a serious disturbance in the wider economy. That was the case here. The provision of support was announced on 14 September. Although the FSA had assured the public that Northern Rock was solvent and that if depositors wanted to get their money out, they could do so, it became clear that further assurance was needed. Therefore, on 17 September, again on the advice and with the agreement of the FSA and the Bank of England, I announced that during the current instability in the financial markets, and should it prove necessary, I would put in place arrangements that would guarantee all the existing deposits in Northern Rock. That undertaking was extended on 20 and 21 September.
	The Treasury, the Bank and the FSA continue to work intensively with Northern Rock with a view to helping it to resolve the situation. Any future solution must lie with the company, but the Government have provided appropriate help and will continue to do so. As I reported to the House on Tuesday, I have extended the Government's guarantee arrangements to all new retail deposits for which Northern Rock will pay a fee, while the Bank has provided an additional loan facility, which has replaced that of lender of last resort. I have today written to the Chairman of the Select Committee on the Treasury and the Select Committee on Public Accounts setting out more details. I am also publishing that letter and placing a copy in the Library of the House.
	There are clearly lessons to be learned from what happened to Northern Rock and the wider instability across the world. The responsibility to minimise risks and prevent problems from happening in a particular bank lies first and foremost with the directors acting on behalf of its shareholders. That is their clear duty. It is the job of the financial authorities to set the policy and the regulatory framework in which institutions and markets work. Let me remind the House of those responsibilities. As the House knows, the Bank of England has complete independence in monetary policy. Its second core purpose is financial stability, a role that it discharges on a daily basis. The FSA, also independent, is responsible for the supervision of individual firms such as Northern Rock. Because of the importance of the financial system for the stability of the economy as a whole and because of the potential impact on the Exchequer in ensuring stability, the Government are rightly also involved. The Treasury is responsible for the overall legislative framework and I am accountable to Parliament.
	It is right that the Bank and FSA should continue with those responsibilities. The model is one that others around the world are now following, but we need to review how the framework has operated and put in place whatever practical improvements are needed. As the FSA has said, it is reviewing its own lessons for itself. I look forward to its conclusions early next year. We need to make more reforms to prevent problems from happening internationally and in Britain. First, when the Financial Stability Forum reports to Finance Ministers at the G7 in Washington next week, I will urge faster rapid implementation of international agreements on solvency, accelerated work on international standards for regulating liquidity, more transparent information on credit ratings and action to improve the transparency of off-balance sheet vehicles. Secondly, I will propose an International Monetary Fund and Financial Stability Forum early warning system to strengthen financial sector surveillance and to identify risks to stability and co-ordinated regulatory responses to them. Thirdly, I can report a European agreement this week to strengthen arrangements for ensuring financial stability in Europe and increase cross-border management.
	It is important that regulators focus on liquidity as well solvency. Here at home, the FSA will shortly set out proposals for a review of the UK liquidity regime. As the Governor has said, all central banks face problems in providing support to banks in difficulty in a world where markets rightly expect high levels of disclosure and transparency. I can therefore confirm that if it proves necessary to clarify in Europe the legal and practical issues surrounding the way in which such support is provided and disclosed to protect financial stability, we will work with other European countries to provide that certainty. We will now review whether rules about swift takeovers of banks need to be changed.
	When problems occur, however, we need to have a system in place that is clear and which reassures depositors. We will introduce legislation in the next Session to establish a new regime. With the FSA and the Bank, I am proposing the principles for the new regime in a discussion document published today. The new regime would mean that depositors would be insulated from a bank that had failed and would provide them with both greater compensation and certainty that their compensation could be paid out quickly. As a first stage, the FSA has decided that the financial services compensation scheme covers 100 per cent. of deposits up to 35,000, but I have made it clear that that is just an initial step towards a more comprehensive change.
	We will continue to work closely with the banking industry, consumer groups and others to agree the new regime, and I hope that there will be cross-party consensus on it. We must all, internationally and domestically, consider what lessons there are to be learned from the summer's events, and if needed I will take action. The changes that we will make will strengthen our reputation as the world's leading international financial centre, and will be founded on our commitment to maintain a strong and stable economy. I commend this statement to the House.

George Osborne: Let us be clear why the Chancellor is making this statement today. This country has seen its first run on a bank for 140 years, and while as he has pointed out the credit problems have been global, it is only in Britain that we have seen people queuing to withdraw their savings. That is because the system set up by the Prime Minister to prevent precisely such a crisis has failed its first serious test.
	There are three accusations facing the Chancellor. The first is that he knew for more than a month that Northern Rock was in trouble and still failed to prevent the crisis. He said in his statement today that the company's business model had made it particularly vulnerable, but he was praising that model earlier this year when he was Secretary of State at the Department of Trade and Industry. The Bank Governor told the Select Committee that a combination of four different pieces of legislation meant that the tripartite committee was powerless. Why did not the Government, with all the contingency planning that they have done over the past 10 years, realise that there was a gaping problem in their new financial oversight system? The director general of the CBI pointed out that
	you don't wait for the cinema to catch fire before you check out whether the fire precautions are going to work.
	Why did the Chancellor choose to give an interview to the press on 12 Septemberthe day before it emerged that Northern Rock was seeking emergency helpin which he attacked the banks and said that they should be more honest? Did he know that, within 48 hours, he would be trying to reassure the public about the honesty of the banking system? Was he not undermined by his own spin?
	Will the Chancellor release the letters that he received from the Bank and the FSA? The Bank Governor has told the Select Committee that he is happy for them to be released, and I am surprised that they have not been released today. When the Chancellor was forced to offer the general guarantee to existing Northern Rock savers, he said that it would be unfair to other banks to extend it to new savers. Why has he changed his mind this week and done just that?
	The second accusation facing the Chancellor is that, when the crunch came, no one knew who was in charge. The Bank Governor confirmed this in an answer to the Select Committee, which I praise for the work that it has done on this matter. When the Bank Governor was asked who was in charge, he answered:
	What do you mean by 'in charge'? Would you like to define that?
	Is not the fundamental flaw in the tripartite system set up by the Prime Minister 10 years ago a flaw that the then Chancellor was warned about when the measures passed through the Housenamely that no one would know who was in charge?
	For example, the FSA says that it saw its job as simply reporting Northern Rock's liquidity problems to the Bank. However, the Bank says that it sees its job as looking at the liquidity of the whole financial system rather than that of individual institutions. Frankly, it is a bit late for the Chancellor to stand at the Dispatch Box and say that we need to review the liquidity regime. Who is in charge? The answer is that the Chancellor of the Exchequer was supposed to be in charge, but he was not.
	The third and final accusation against the Chancellor is that he does not yet seem prepared to take strong and decisive action to prevent such a disaster happening again. He says that he wants cross-party consensus. I wrote to him on 20 September offering the full co-operation of the Opposition in making the legislative changes necessary to protect depositors and to allow the Bank to do its job. He has not bothered to reply to me, but I can tell him that we will work with the Treasury on this to create an oversight system that works.
	The proposals that the Chancellor has set out today, and those that he is consulting on, need to meet certain tests. We need to be clear about who is responsible for monitoring liquidity and to ensure that regulation does not prevent us from dealing with a liquidity crisis when it arises. We need to be clear whether the regulation is European or has been gold-plated by the British Government. We need to reinforce the independence of the Bank so that there can never again be any suspicion of political pressure. We also need to insist that any new system, while protecting savers, does not stifle financial innovation or protect investors when that innovation goes wrong.
	Will the Chancellor explain why he failed to mention the 100,000 figure that he gave to a newspaper in an interview three weeks ago as the sum that was likely to be covered by deposit insurance? It was not mentioned in his statement or in the consultation document, yet he chose to mention it to a newspaper. We also need to take steps now to tackle the growing personal and public debt that leaves Britain's economy more exposed than others to financial turbulence, and we need to be clear about who is ultimately in charge.
	It will take many years for the memory of the queues of panicked savers on our high streets to fade. The Government's boasts about stability and financial competence will now ring hollow. We will work with the Government on the changes that are needed, but the first thing that the Chancellor needs to do is to take responsibility for this mess. It is about time he provided the leadership and the decisive action that his high office demands.

Alistair Darling: I am grateful to the hon. Gentleman for what I take it was meant to be helpful advice, at least in respect of some of his comments. Let me deal with the points that he has raised.
	As I told the House in my statement, it first became apparent to the FSA and the Bank in the middle of August that Northern Rock had difficulties. Between then and Northern Rock formally asking the Bank for facilities, a great deal of effort was made to try to help Northern Rock to resolve the position. The position was monitored on a daily basis, and Northern Rock was in close contact with the FSA, the Bank and the Treasury. During that period, a number of alternative courses of action were looked at, but unfortunately they did not work.
	The problem that Northern Rock faced was that, because it had to get new financing facilities on a pretty regular basis and because the market could spot that fairly quickly, it became apparent that it was in difficulties. It could not therefore get access to funds, and the price that it was being charged was going up. I can tell the hon. Gentleman, however, that we did everything that we could to try to resolve the situation without special support becoming necessary. Eventually, however, it became obvious that unless special facilities were made available, the bank would be in very great difficulty indeed.
	That brings me to the second point that the hon. Gentleman raised, on help for banks. The Governor did not say that the Bank was unable to help Northern Rock because of current legislation. What he was talking about was whether that help could be given in a covert way as opposed to being completely open about it. I am bound to say to the House that this is a real problem. In this countryand perhaps right across the worldwe have been moving towards more transparency and openness, which is generally a pretty good thing. The difficulty was that, because Northern Rock's trading position had deteriorated so rapidly, it was advised by its own legal advisersfor perfectly understandable reasonsthat it would have to issue a profits warning. It was also coming to the view that, because of its listing requirements, the fact that it was about to get facilities from the Bank of England would probably have to be disclosed. The Governor was also saying that the current legislation might require that disclosure. In addition, he made the point that, if it had been possible to arrange for another bank to come in, part of the takeover code might make that difficult over a weekend. I am looking at all these things, and if we need to change the legislation, we certainly will.
	When we were discussing these matters prior to the Bank's support being made available, I was pretty sure that it would get leaked, and I was absolutely right. The House will know that the story was broadcast by the BBC the night before the formal announcement was made, which is what led to the difficulties over the next few days. We need to look at that, because it is in the interests of the financial system not only in this country but across the world that, if central banks need to intervene, they should be able to do so in a way that is sensible.
	The hon. Gentleman raised a number of other points. The Chairman of the Treasury Committee has written to me asking about the letters that I have received from the Governor and the FSA, and I will respond to my right hon. Friend before I appear before the Select Committee later this month. Yes, we have extended the guarantee, because I believe that it is right to help Northern Rock to have a period in which it can explore the options available to it, with a view to resolving these difficulties.
	On arrangements between the Bank, the FSA and the Treasury, ultimately I am responsible to this House for whatever they do; that is part of being Chancellor. I hesitate to agree, however, if the hon. Gentleman is suggesting that we should move towards a situation in which the Bank or the FSA were merged, which would not be the right thing to do, as the institution would become unmanageable. If the question is whether I think that improvements should be made and that we should look further into the arrangements between the Treasury, the Bank and the FSA, of course that is the case. We do need to learn the lessons.
	Finally, I am consulting on the protection of consumers. Having had some experience with courts in relation to consultation, I put out some general principles because the law appears to be that, if Ministers consult and then go on to close off or close down some of the options, we have to start all over againand I do not want to get myself into that position.
	In conclusion, there are clearly lessons to be learned from what happened with Northern Rock, but as I have said on many occasions over the past few weeks, we benefit from having a strong economy and a generally strong banking sector, which I believe will enable us to get through these difficulties and maintain our reputation as the world's leading financial centre.

John McFall: I thank the Chancellor for his statement. He knows that the Treasury Committee is looking into the issue and doing so in a wider context. The point that he raised about covert operations brings into question the concept of the lender of last resort, which is an issue that the Treasury Committee will be looking into. The real issue is how we help to protect depositors. Is the 35,000 figure correct? I would suggest that the key is consumer confidence. If consumers do not have confidence, the figure will be incorrect and it is important that we have the widest consultation on that. Another lesson is that depositors need easy and immediate access to their savings. Given that more than a quarter of global assets are now internationally owned, we need to address these problems in an international context. Will the Chancellor tell us exactly what he intends to do in that particular area?

Alistair Darling: I am grateful to my right hon. Friend. As I said a few moments ago, I am due to appear before the Treasury Committee later this month.
	My right hon. Friend is absolutely right that this matter needs to be addressed internationally as well as here at home. I said in my statement that I thought that a number of steps were necessary internationally. We have to ensure that regulators look not just into the solvency of institutions but into any liquidity problems that they might have. That also means ensuring that current rules as they apply internationally as well as domestically allow regulators and institutions to focus on that.
	My right hon. Friend is quite right too about the deposit protection scheme. A number of steps are necessary to reassure people. If a bank fails, it should be possible immediately to remove the depositors' money from it and run it separately, and ensure that it can be paid out as quickly as is reasonably possible. I have made it clear that the 35,000 is a first step; that is all that the FSA can do at the moment. I think that we need to go beyond that. That is precisely why I am consulting, because, of course, the scheme is financed by banks and other financial institutions. International action, as well as action to protect depositors, is absolutely essential.

Vincent Cable: I thank the Chancellor for making his statement. He could have hidden behind his Tuesday written statement and the pre-Budget report, but he has come before the House now, which is good. I am afraid that that is the only positive thing that I want to say, because this statement reeks of complacency. Frankly, the Government have become complicit in large-scale irresponsible lending by the same managementand it continues even todayin what amounts to little short of a banking scam.
	It has already been said that financial turbulence has existed in the financial community internationally throughout history, but this is the first time since the collapse of Overend, Gurney and Co. in 1866 that we have had a run on the system. The Chancellor talked about the business model, so does he agree with the FSA that that model was, in its words, extreme? This was a bank that was doubling its mortgage lending in six months and taking 20 per cent. of the market, on the back not of depositors but of large-scale rapid securitisation into markets, which became discriminating and pulled the plug on it.
	The Chancellor said in his Tuesday statement that the bank had very little exposure to the sub-prime market directly, but is he aware that, indirectly, it was forced to issue a statement on 14 September acknowledging that 600 million of its assets30 per cent. of its shareholders' fundswere of questionable provenance? I know that there has been a postal strike, but why was that information not communicated to the Treasury, which seemed to be unaware of it?
	Worse, is the Chancellor aware that the same lending practices are continuing today? A member of my Treasury team, Lord Oakeshott, rang the bank yesterday and made inquiries about its mortgage opportunities. As we would expect, he is someone of good credit standing, but the terms that he was offered were quite extraordinary. He was offered 127 per cent. of the value of the house, including the roll-up of the arrangement feefive to six times his incomeand 30 per cent. of the loan was to be unsecured. I do not know whether that is what the Chancellor meant when he talked about a return to old-fashioned lending practices. In the current economic circumstances and given the warnings about house prices from the Royal Institution of Chartered Surveyors, most reasonably cautious bankers would say that that borders on the insane. It is happening because the Government are underwriting the bank. That is precisely what the Governor of the Bank of England warned of when he talked about moral hazard.
	Will the Chancellor tell us how much taxpayers' money is exposed to this bank? I believe that there is 11 billion in lending and 23 billion in guarantees, so we are talking about a sum of money in one bank that is roughly equivalent to annual spending on the armed forces. When the Chancellor agreed to the effective nationalisation of the liabilities of this bank, why was the managementincluding the chief executive, who has been paid 10 million in five years for taking his bank on to the rocks, and the directors, including the ubiquitous Wanlessnot sacked? I would include the FSA, which has admitted that in 18 months it did nothing to check the bank.
	We all understand that once the run had started, the Chancellor had no alternative but to guarantee deposits, as opposed to the institution and the shareholders, and I am sure that that was right, but why is he now extending that guarantee to new depositors? Does that not encourage irresponsible lending and is it not unfair on other banks that are acting responsibly? Is it not even more unfair on pensions institutions, which, as the hon. Member for Wolverhampton, South-West (Rob Marris) reminded us yesterday, do not have such a guarantee?
	My concluding point is that this is not just a passing embarrassment. It is potentially a tragedy for the 5,000 or more people in Newcastle whose livelihoods depend on the bank, but it is also a scandal in which substantial numbers of people in the financial community are heavily involved. When the Chancellor has taken the necessary prudential action, will he have a full independent

Mr. Deputy Speaker: Order. I was reluctant to interrupt the hon. Gentleman, but he is going beyond the conventional length of time that he is allowed.

Alistair Darling: First, the hon. Gentleman suggested that I should have sacked all the directors of the Northern Rock bank, but I do not have the power to go around sacking the directors of any company. The company is owned by its shareholders and the directors are responsible for the running of it. The decisions taken by Northern Rock in respect of its business model and its lendingwhether generally or to the noble Lord Oakeshott in particularare a matter for the bank and not for any Minister. The hon. Gentleman seems to be confused about that. The bank belongs to its shareholders and is run by the directors. If the directors are to be changed, it is a matter for the shareholders.
	The FSA is responsible for the regulation of Northern Rock. The chairman of the FSA, Sir Callum McCarthy, said before the Select Committee earlier this week that it clearly has lessons to learn about the supervision of not just this bank but others. The hon. Gentleman seemed to suggest that Northern Rock's problems were because of the sub-prime market, but according to the FSA the bank has a good quality loan book. That has been fairly well established over the last few years.
	I was not clear whether the hon. Gentleman was for or against the guarantee that was given: he seemed to shift his position two or three times. It was necessary to provide the guarantee for the stability of the financial system as a whole. The present arrangements are also necessary to give the bank time to make whatever adjustment is appropriate and whatever arrangements are appropriate for the future.

Doug Henderson: My right hon. Friend will know that Northern Rock employs 4,000 people at its headquarters in my constituency. Contrary to the attitude and tone adopted by the official Opposition, and the lack of support given to Northern Rock and the people who work there by the Liberal Democrats, depositors around the country very much welcomed the action taken by the Government and the Bank of England in September, and again this week, to protect deposits. People who work at Northern Rock in my constituency have made the point to me that the business is viable, and if it is kept together as an entity it will continue to be viable and the jobs of 4,000 people in my constituency and 1,500 people in the constituency of my hon. Friend the Member for Sunderland, South (Mr. Mullin) will be protected. That is the priority. Will my right hon. Friend use his good offices to do what he can, even in an unpredictable situation, to retain that entity?

Alistair Darling: My hon. Friend makes a good point. The Northern Rock bank is of great importance to his constituents and to the north-east of England. It enjoys a good reputation and employs more than 6,000 people nationally. I very much hope that a solution can be found in the next few weeks and months that will enable the bank to continue. Ultimately, that will be a matter for the bank, but I very much recognise the point that my hon. Friend makes and the importance of the Northern Rock bank to Newcastle in particular.

Peter Atkinson: The Chancellor will accept, however, that there is widespread concern and anger in the north-east at the way in which the affair was handled. In particular, what provoked the Bank of England to announce that Northern Rock was looking for help? The European Central Bank managed to rescueI thinktwo German banks and a French bank without a similar panic. I am at least grateful that the Chancellor appreciates the importance of the bank to the north-east economy and to many of my constituents, who, like those of the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), want to see the bank rise again. As the Chancellor said, the order book is strong. We will note the complete lack of support from the Liberal Democrat spokesman for the bank and the people who work in it in the north-east.

Alistair Darling: As I said in reply to the shadow Chancellor, the difficulty with the announcement that the Northern Rock bank would get specific help from the Bank of England was that, as I always suspected, somebody told the BBC about it. In the light of that, the information could not have been kept private. That is a problem not just in this country but across the world. We want to be as open and transparent as possible, but there will be circumstances in which support may be necessary for one or a group of institutions, and if someone chooses to go and tell the BBC or another outlet about it, the whole thing becomes public. That is the reason why the decision was ultimately taken to make an announcement. Unfortunately, just a few hours before that announcement was made, a highly damaging story appeared on the BBC that caused huge problems for the Northern Rock bank. That is a problem, and we will have to consider how to resolve such problems in future. I agree with the hon. Gentleman, who represents a constituency just outside Newcastle and will know the importance of the bank to the north-east. The more that we can do collectively to help the situation, and not make sometimes irresponsible statements, the better.

David Clelland: As a long-standing customer of Northern RockI suppose that I should declare an interest in the usual way in that regardI assure my right hon. Friend that savers are very grateful to the Government for the support afforded at a difficult time. Our concern, however, has now turned to the future. What can the Government do to help to ensure the continuation of Northern Rock as an independent north-east based company? Will he take on board the comments of my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) and assure the House that the Government will help to protect the security of employment of thousands of Northern Rock staff in the north-east, and to protect the Northern Rock Foundation, which supports arts and culture, young people, children in need and other disadvantaged groups across our region?

Alistair Darling: On that last point, as my hon. Friend knows, the Northern Rock Foundation has given grants of more than 28 million, and that is one of the reasons why the Northern Rock bank has much popular support in the north-east, along with the fact that it is a major source of good-quality employment. The most significant thing that the Government can do is to continue to provide the support that we have offered to Northern Rock, and to give it time to consider its strategic options. We stand ready to do whatever is appropriate as and when the bank decides what the best option is.

Michael Fallon: Which of the two regulators has primary responsibility for ensuring that banks are sufficiently liquid as well as solvent? Why did Ministers choose to implement the EU market abuse directive in such a way as to take out the exemption of situations of grave and imminent danger, thus making a rescue more difficult?

Alistair Darling: On that latter point, as I said a few moments ago, the EU directive was not the stumbling block. We looked at many considerations. As I said in reply to the shadow Chancellor, given that the bank was going to have to issue a profits warning, that it had to have regard to the listing requirements and the impact of getting facilities from the Bank of England, and that the news would almost certainly get leaked, which turned out to be the case, we believed that it was better to make an announcement than not to do so. If we need to look at the current law, we will do that. In relation to the hon. Gentleman's first point, the primary responsibility for supervision of individual institutions lies with the Financial Services Authority.

Chris Mullin: May I underline the points made by my hon. Friends the Members for Newcastle upon Tyne, North (Mr. Henderson) and for Tyne Bridge (Mr. Clelland)? Despite all that has happened, Northern Rock is a respected institution, and remains so, in the north-east. It also employs a large number of my constituents. No one wants to see it taken over by some predator and asset-stripped. Will my right hon. Friend do all in his power to prevent that from happening?

Alistair Darling: I know that my hon. Friend also represents a constituency where many people work for Northern Rock. As I said, I am happy, on the part of the Government, to do everything that we can to bring about a satisfactory conclusion to this matter. Obviously, it is for the company to decide what the best option is. If the Government can help in an appropriate way, I will certainly consider any proposal put to us.

Peter Tapsell: Does the Chancellor deny that ultimate responsibility for the crisis in Northern Rock, which has done such worldwide damage to the reputation of British banking, lies with our present Prime Minister for removing banking supervision from the lender of last resort? May I put it to the Chancellor that no amount of tinkering about improved liaison between the Financial Services Authoritywhich has never commanded much confidence in the Cityand the Bank of England will overcome that fundamental problem? That was one of the reasons why the then Governor, Lord Eddie George, nearly resigned when that new scheme was imposed on him by the present Prime Minister.

Alistair Darling: Perhaps I can remind the hon. Gentleman that even in the old days to which he refers the Bank of England was responsible for the prudential supervision of banks but not for the supervision of many of the activities in which banks were involved, such as the sale of insurance. I also remind him that 10 years ago, no fewer than seven different regulators operated in the market: the Bank of England; the Securities and Investment Board; the Building Societies Commission; the Register of Friendly Societies; the insurance division of the Department of Trade and Industry; and three self-regulating organisationsthe Investment Management Regulatory Organisation, the Securities and Futures Authority and the Personal Investment Authority. No one wants to go back to those days, when seven organisations were sometimes responsible for the same institution. That makes no sense at all. Having the central bank responsible for the stability of financial markets, and one organisation responsible for the supervision of institutions, is the right way to go, and most countries are moving towards that model, not towards the regime that was around many years ago, which would not work in today's markets.

Sharon Hodgson: As a former employee of Northern Rock, a former shareholder and someone who still has an account with Northern Rock, I join my hon. Friends from the north-east in giving personal testimony both to Northern Rock's status as a great employer and to the fondness for it that lies in the hearts of all north-eastern people. Everyone in my constituency, and in the north-east more widely, will know someone who works for Northern Rock, has a mortgage with it or holds an account with it. As has already been said, it is vital for us to give it all the help we can to resist any hostile takeover, and to continue as a north-east based bank.
	As my hon. Friend the Member for Tyne Bridge (Mr. Clelland) pointed out, the Northern Rock Foundation is one of the major charitable givers in the north-east. Will my right hon. Friend commend the campaign by  The Journal, which has done a great deal to highlight the need for the company to remain based in the north-east?

Alistair Darling: I know that the Newcastle  Journal has been running a campaign, and that is not surprising because the Northern Rock bank is of great importance not just to Newcastle but to the north-east.
	As I said earlier, the Government are providing support through the guarantee for Northern Rock, which will allow it time to decide which strategic option is best for it. However, as I have said many times this afternoon, at the end of the day it is for the bank's directors to make that decision. It is their bank, and they must decide what is best. If we can help and it is appropriate for us to help we will do so, but ultimately the bank's directors are responsible for all the decisions that they have made in the past and for any that they may make in the future.

Alan Beith: It is clear to me that there were failures on the part of the regulatory bodies and also on the part of the directors of Northern Rock, who should have been questioning the extent to which their bank had become dependent on short-term lending, far out of line with all other banks.
	Does the Chancellor recognisehe has already indicated in part that he doesthat the bank as an institution is hugely important in the region, and that the Northern Rock Foundation, with its 5 per cent. share of the bank's pre-tax profits, is also hugely important throughout the north-east? Whatever emergeswhether the institution is reformed or others participate in it to give it a futureit will be necessary to recognise the social responsibility that has been shown by Northern Rock as a company, and the need to support the work done by the Northern Rock Foundation in future.

Alistair Darling: I agree with much of what the right hon. Gentleman has said. I repeat that both the bank and its foundation are very important to the north-east, and are much appreciated.

George Mudie: I agree with the shadow Chancellor's analysis: a lack of liquidity was central to the problem. We need to know from the Chancellor whether he has had a satisfactory explanationperhaps even an apologyfrom the Bank of England for its bizarre initial decision not to follow the lead of the Fed and the European Central Bank in putting that liquidity into the system. That decision was reiterated a week before the event, and in full knowledge of the Northern Rock position, in a three-page letter which was made public and sent to the Treasury Select Committee, and was reversed after the Northern Rock fiasco. A good, sound bank was brought down by strange decisions, and I think that the House should know whether the Chancellor has spoken to the Governor and received an adequate explanation.

Alistair Darling: As the House would expect, I have had many conversations with the Governor, as well as with the chairman of the FSA. As I said in my statement, the Bank of England did make funds available to the market, but Northern Rock's position was such that even with the money in the system, it was clear that it was experiencing more and more difficulties. As I said in reply to the shadow Chancellor, the market quickly became aware that Northern Rock had a problem which meant that it was finding it difficult to obtain funds, and the price of the funds that it did obtain was rising. That is one of the factors that eventually made it clear that only specific help for Northern Rock would be appropriate.

Philip Davies: Can the Chancellor explain what he and the Bank of England are doing to ensure that the turmoil we have seen in the credit markets and in Northern Rock does not reduce competition in the mortgage market, and to ensure that any advantage does not fall into the hands of big United Kingdom and overseas banks?

Alistair Darling: I agree that it is important for us to have a competitive mortgage market, and we have such a market. There are many different mortgage providers. But I do not think it would be right for the Government to decide whether a particular company should or should not be taken over. We have a Competition Commission to examine such matters, and if it considers that anything is happening that is anti-competitive or would affect the mortgage market as a whole it has the power to intervene.

Sally Keeble: I welcome what my right hon. Friend said about changes in the regime for the credit-rating agencies and the liquidity rules. Will he tell us what he will do to ensure that discussions are speeded up internationally so that we see improvements here, and will he assure us that the United Kingdom, as the leader in financial services, will also take the lead in ensuring that those improvements are implemented?

Alistair Darling: My hon. Friend has made some very good points, especially about credit-rating agencies. I agree that international action is needed to ensure that reforms are implemented. It should also be borne in mind that information from a credit-rating agency is just one piece of advice on which directors draw. Ultimately, the directors of an institution must form their own judgment on whether the lending into which they are entering is sound, orif they are buying pieces of commercial paperwhether they know what lies behind them.
	My hon. Friend is right about another aspect of international action. I said that I hoped to be in Washington next week at the meeting of the International Monetary Fund. I think that the events that originated in America and have now spread across the world must serve as a wake-up call alerting those who have talked of the need for changes in relation to liquidity, in particular, to the necessity to do something about it. I am ready to show a lead in this country, and I will do all that I can to persuade my fellow Treasury Ministers to take action as well.

Mark Field: I broadly agree with the Chancellor's observations about transparency, but in lamenting the lack of flexibility, does he not recognise thatas my hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell) rightly pointed outmuch of the blame must lie with the Government, who changed the regime in 1997? With hindsight, would the Chancellor prefer Northern Rock to have been taken over by another bank? Would that have been preferable to the rather unseemly and hasty reaction that we saw from him?

Alistair Darling: The decision on whether Northern Rock should merge or be taken over by another institution had to be a decision for the directors. The advantage of the Government's continuing to provide support is that the directors will now have several weeks in which to consider which option is best for them.
	I strongly disagree with what the hon. Gentleman said about the regulatory regime as a whole. I am not sure whether he was advocating a return to the pre-1997 position, but as far as I am aware no one outside the House has advocated such a course. As for the boundaries between the FSA and the Bank of England, obviously we will keep that under review; but I think that fundamentally the structure is right, although there are clearly lessons to be learned from what has happened over the last few weeks.

Several hon. Members: rose

Mr. Deputy Speaker: Order. Mr. Speaker has a rule that Members who wish to put a supplementary question to a Minister who has made a statement should be present at the start of the statement. I understand that one or two Members have powerful constituency reasons for wishing to ask a supplementary question, but I will place them at the end of the queue, and give priority to those who have been here from the beginning.

John Redwood: Given that this was a monetary policy crisis made in Downing street and Threadneedle street, why was no action taken in early September, when many of us were warning that the credit crunch was too severe? If the Monetary Policy Committee is to be anything more than a highly paid monthly debating competition, its rates must be enforced by the vigorous use of open-market techniques by the Bank of England. Unlike other banks, the Bank of England failed to take such action, thus needlessly putting not just Northern Rock but several other financial institutions at risk. Why did the Chancellor not intervene earlier?

Alistair Darling: I am bound to recall that just a few weeks ago, the policy commission that the right hon. Gentleman chaired suggested to the Conservatives that there was
	no need to continue to regulate the provision of finance, as it is the lending institutions ... taking the risk.
	I think the right hon. Gentleman ought to reflect on what he was recommending a few weeks ago.

Paul Farrelly: I am afraid to have to admit that I have worked in the banking sector in the City, and I was the City editor of a national newspaper. I am too young to have witnessed at first hand the secondary banking crisis of the early 1970s, unlike the hon. Member for Louth and Horncastle (Sir Peter Tapsell), but I have seen a few rollercoasters in the past 25 years, when stock markets and the banking sector have all too easily forgotten the painful lessons of history. We must remember that Northern Rock did not go bust, unlike Johnson Matthey Bankers and Barings under a previous political and supervisory regime. Also, Northern Rock depositors were protected. Regrettable though those queues outside Northern Rock were, does the Chancellor agree that, as long as lessons are learned by all involved, short, sharp shocks to the banking sector in general are not necessarily a bad thing to warn against unwise lending practices and against forgetting those lessons of the past?

Alistair Darling: It is important that banks and other lending institutions, when they are lending money, satisfy themselves that whoever they lend money to can repay it and that, if they are lending it against security, the security is sufficient to allow the loan to be repaid if necessary. People should also remember that the financial institutions and the financial services industry in this country are generally pretty strong, which is why we have a very good international reputation. I am determined to keep it that way.

William Cash: The Chancellor will know that, under the memorandum of understanding, the principles are unambiguous accountabilitythe public must know who is responsible for whattransparency and avoidance of duplication. Given that the arrangements provide only for partial independence for the Bank of England, can he explain, in the context of the market abuse directivethe MAD directive as it is called, aptlyand other directives how he is able to discharge his responsibility for the overall functions when he has to look over his shoulder the whole time at what is being decided, potentially, by the European Court of Justice in relation to European directives that have a direct impact on this matter? How will he resolve that question?

Alistair Darling: I know that the hon. Gentleman tends to blame Europe for just about everything. It is worth bearing in mind the fact that the market abuse directive governs disclosure of inside information. As I said earlier, I do not think that that was the key determinant in this case. However, I am prepared to look at all those matters and if we need to make changes we will certainly do so.

Stewart Hosie: May I make the same declaration of interest as the Chancellor? I have a mortgage with Northern Rock and no savings with that bank.
	I welcome the statement and the good advance notice of it. I welcome in particular the intention to have more comprehensive protection for depositors, the issues he raised about his intentions for the Financial Stability Forum, the proposed international warning system, and the discussion paper. I also note the review of the rules on swift takeovers of banks, which I am sure will look at issues of transparency and at weekend takeovers, which was a particular issue in this case. However, the review of the takeover rules is outwith the scope of the consultation in relation to the discussion paper. When does he intend that review to start? When does he expect recommendations or proposals to be brought to the House for further discussion?

Alistair Darling: The discussion paper is pretty broad; that certainly would not discourage anyone who wants to make representations on that matter or anything else from doing so. If it is the case that any of the legislation currently in place would prevent action from being taken, of course we will look at it, although I do not think that that was the fundamental problem in relation to what happened with Northern Rock. Otherwise I am grateful to the hon. Gentleman for his support on our broad approach.

Peter Viggers: When the Prime Minister invented the tripartite system of control of banking, informed commentators said that it would be inadequate in a crisis, and so it has proved. The Chancellor has now joined the FSA and the Bank of England in supporting the present regime, but if this is success, what is failure? Is not the fundamental flaw in the system the fact that the FSA is firmly responsible for the supervision of banks and building societies, whereas the levers of financial control are held by the Bank of England?

Alistair Darling: I am not sure whether the hon. Gentleman is suggesting that the two should be merged, but I would have some concerns about that, because it would create an extremely large organisation that dealt with individual supervision, the stability of the financial markets and monetary policy. I am not sure that that is the right approach. I certainly would not want to go back to the regime that we had before 1997. I am not making a party political point; I just think that that regime may have been appropriate in the 80s and 90s but it is not appropriate for the 21st century markets.
	We should not lose sight of the following: it was not because of the present supervisory structure that Northern Rock got into trouble. It had a particular business model which left it very exposed in the event that liquidity dried up. It is important that we keep that at the forefront of our minds when deciding what to do. Whatever changes are necessary, it is important to remember what the problem was in the first place and the problem that we are trying to fix.

Bernard Jenkin: As my hon. Friend the Member for Tatton (Mr. Osborne) said earlier, that business model was endorsed by the Chancellor himself in the spring. There is something structurally unsound about expecting the Bank of England to be responsible for the overall stability of the financial system when it is not responsible for the stability of individual institutions, upon which the stability of the markets overall depends. Is he not failing to learn the central lesson of this crisis, which the Government and the Prime Minister were warned about when the Financial Services and Markets Act 2000 was passing through the House? They were warned that dividing the responsibilities left no one in charge. Who should have taken charge? Will the Chancellor answer that question?

Alistair Darling: On the present division of responsibilities, as I said in reply to the hon. Member for Louth and Horncastle, before 1998 the Bank of England was responsible for the prudential supervision of banks but not all aspects of what banks were actually doing. I do not think that going back to that system would be a good idea. I have said on a number of occasions that there are lessons to be learned and we will look at them, but a return to the old days is not appropriate.

Nicholas Winterton: I am conscious of the importance of Northern Rock to the north-eastnot only the employment it offers but the valuable contribution it makes to the community through its foundation. However, may I put to the Chancellor a straightforward question, to which I hope he will give a straightforward answer? Did irresponsible lending and the provision of irresponsible packages by mortgage brokers in any way contribute to the problems that were encountered by Northern Rock?

Alistair Darling: The problem in relation to irresponsible lending was primarily in the United States. When the sub-prime market collapsed there, it was largely as a result of the fact that people had been able to take out mortgages who were in no position to repay them, especially when interest rates went up. According to the FSA, Northern Rock has a good mortgage book. That point has been made by a number of my right hon. and hon. Friends, who are aware of the importance of Northern Rock.
	The difficulty that Northern Rock had was not because of its exposure to the sub-prime market per se. It was because, as I explained in my statement, when credit virtually dried up, it found it very difficult, with the particular model it had, to refinance its loan book. That is why it got into difficulties. I think that there are lessons for everyone here. In particular, institutions have to ask themselves whether they have any particular exposure and, if there is one key element of their business that is critical, what provision they have if something goes wrong. It is the responsibility of directors as well as regulators to get that right.

Colin Breed: Is the Chancellor satisfied that the FSA discharged its responsibilities in terms of its supervision of Northern Rock satisfactorily and appropriately, including the normal stress-testing exercise that it would undertake to test any vulnerability to a particular institution?

Alistair Darling: If the hon. Gentleman has had an opportunity to read the evidence that Sir Callum McCarthy gave to the Treasury Committee [ Interruption. ] The hon. Gentleman is a member, so he was there. In which case, he will have heard what Sir Callum had to say about the lessons that the FSA is drawing from this and the steps it is taking to make sure that its procedures can be tightened up.

Brooks Newmark: As a Newcastle United fan, I think I should declare an interest. I appreciate that there is a consultation process going on over the 35,000 depositor guarantee, but why did the Chancellor speak to a national newspaper about a 100,000 guarantee? Surely that undermines his own consultation process.

Alistair Darling: It is not unusual for Chancellors, Ministers or indeed Opposition spokespeople to give interviews to newspapers. I said earlier that I would publish my consultation, which I do not want to pre-empt. It is important that people have the opportunity to put forward their views, which the Government will then consider with a view to early legislation.

Fraser Kemp: My apologies, Mr. Deputy Speaker, for being a little late for the opening of the statement. I was meeting representatives of the staff at Northern Rock.
	The decisions that my right hon. Friend has taken are welcomed by people in the north-east, as they have given sufficient breathing space to the company so that it is not bounced into a decision or a sale that would prove unsatisfactory in the short and long term. One of the major considerations in the strategic decision that the bank has to make should be the future of the staff: the many thousands who work in the constituencies of my hon. Friends the Members for Newcastle upon Tyne, North (Mr. Henderson) and for Sunderland, South (Mr. Mullin), as well as those seeking the 2,000 additional jobs at a development at Rainton Bridge in my constituency. My right hon. Friend's decisions have allowed a more rational approach to be taken, rather than allowing the bank to be sold off to a hedge fund, which could have happened within a short period.

Alistair Darling: I am not sure if my hon. Friend was here earlier, but the opportunities are now there for the bank to take some important strategic decisions as to what it does in future. I hope that there will be a satisfactory outcome.

Roberta Blackman-Woods: I, too, very much welcome my right hon. Friend's statementI was here for the startand the emphasis that it placed on maintaining stability in the financial sector. I have heard comments about Northern Rock from hon. Friends from across the north-east whose sentiments I very much share. What pressure are the Government putting on Northern Rock to ensure that the jobs stay in the north-east and that the charitable arm is protected in any future negotiations?

Alistair Darling: My hon. Friend is aware of the importance of Northern Rock and its foundation to the north-east. I hope that the directors of the bank can now decide on a satisfactory option for the future, but they have to make the decision; it is their bank. The Government can certainly provide them with support to enable them to get the breathing space to which reference has been made. I hope that the bank and its directors will come to a conclusion as soon as they can that proves to be satisfactory for the future of the bank.

GREATER LONDON AUTHORITY BILL (PROGRAMME) (NO. 2)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A (Programme motions),
	That the following provisions shall apply to the Greater London Authority Bill for the purpose of supplementing the Order of 12th December 2006 (Greater London Authority Bill (Programme)):
	 Consideration of Lords Amendments
	1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion three hours after their commencement at this day's sitting.
	 Subsequent stages
	2. Any further Message from the Lords may be considered forthwith without any Question being put.
	3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement. [Mr. Michael Foster.]
	 Question agreed to.

Orders of the Day

Greater London Authority Bill

Lords amendments considered.
	Before Clause 3
	 Lords amendment: No. 1.

John Healey: I beg to move, That this House disagrees with the Lords in the said amendment.
	I welcome the hon. Member for Bromley and Chislehurst (Robert Neill) to the Front Bench and to the Dispatch Box again after last night. During consideration of the Bill, he has moved from the Back Benches to the Front Bench and has seen it through every stage, as has the hon. Member for Carshalton and Wallington (Tom Brake). They have lived with the Bill for longer than I have and I look forward to their contributions.
	Lords Amendment No. 1 would amend section 21 of the Greater London Authority Act 1999, to disqualify a person from being the Mayor or an assembly member if they had been Mayor twice before. This would have the effect of restricting the Mayor to two terms of office. The purpose is clear: they cannot beat Ken Livingstone at the ballot box, so they are trying to bar him from standing at all. It should be for Londoners to decide whether they want Ken Livingstone to continue to serve as their London Mayor, not MPs from all parts of the UK and certainly not members of the unelected House in another place. We do not agree with the Tories and the Liberal Democrats on this and we will not accept the amendment.
	The amendment goes right to the heart of the GLA's constitution and its key principle of a strong executive Mayor whose democratic mandate and political legitimacy is derived from direct elections. The amendment and the change, as put together by an alliance of Tories and Liberals in the other place, challenges one of the underlying constitutional principles of British political life, namely, that there should be no term limits on any elected representatives to any political office. That applies to MPs, councillors and members of the devolved Administrations, all of whom can serve for as long as the electorate lets them.
	I am not alone in arguing this. In Committee, the hon. Member for Surrey Heath (Michael Gove) argued forcefully that
	we have to accept that the whole principle of term limits is alien to the British constitution.  [Official Report, Greater London Authority Public Bill Committee, 18 January 2007; c. 329.]
	The issue has been well debated in another place and here, and I am aware of the arguments of those who favour term limits for the mayor. They have argued that term limits would provide an important check on an office-holder who yields considerable executive power when in office. They have argued also that it would help the office to be refreshed and reinvigorated regularly, but these arguments do not stand up when subject to scrutiny.
	There is a tendency to think that, because the US president and the elected mayors of some US cities have term limits, the Mayor of London should do too. But the electoral arrangements for the office of Mayor of London need to reflect both London's particular circumstances and the wider political and democratic culture in this country. I strongly believe that the regular elections for Mayor every four years under the GLA Act already provide a strong check on an incumbent Mayor. Furthermore, unlike some American cities, London is not a one-party city where a favoured candidate can be shoed into office and remain Mayor for life.
	First, the electoral arrangements in place for the Mayor under the GLA Act require that a successful candidate have the support of the majority of voters. Secondly, politics in London is and always has been highly competitive. Finally, given the high national profile of the Mayor of London, all major political parties would naturally and normally want to ensure that they have at least a credible candidate standing on their behalf. These factors together ensure that each mayoral election campaign is hard fought and each campaign gives a fresh mandate to the post of mayor, whether or not it goes to the incumbent.

Mark Field: Where towns or cities are in effect one-party statesthere are perhaps more of them involving his party than mineshould there be term limits? I very much agree with almost everything that he said until that point, at which he almost partly recognised that the reason why he did not want to see term limits in London was that it was much more competitive. Surely that should have no effect on the matter.

John Healey: No, I am simply trying to do justice to some of the arguments that were made in debates during previous stages of the Bill. Central to my argument is the principle that the electorate, which in this case is Londoners across London, have the right to throw out an incumbent Mayor; they have the right to pass judgment on the performance of the Mayor at regular elections.
	I hope that the sense displayed by the hon. Member for Surrey Heath will prevail with the hon. Member for Bromley and Chislehurst and his colleagues, and that they will back us in the Lobby this afternoon. Unless they do so, people will rightly conclude that they have no confidence in their candidate for Mayor and that they are running scared that Ken Livingstone will win a third term in office.

Bob Neill: I thank the Minister for his kind words. The matters under discussion have been an entertaining London special for many of us who have been involved in them. The Bill has had an interesting progress, and I hope that we will not delay the House too long in dealing with the remaining issues.
	The purpose of the House of Lords is to raise issues and to ask Members of this House to consider and reflect on matters, but this House should, of course, be the ultimate determiner. It is neither unreasonable nor surprising that this issue was debated in the Lords. What comes across from reading the  Hansard records of the debates in the other place is that their Lordships were not only concerned about the term limits issue itselfabout which there is legitimate widespread debate, particularly in academic circlesbut many of them were driven by a sense of frustration at the lack of internal checks and balances in the operation of the Greater London authority. I have sympathy with their Lordships on the symptoms that they identified but, for reasons that I will come on to, I do not think that the cure proposed is appropriate.

Mark Field: Unlike my hon. Friend, I have not had the opportunity of reading the  Hansard reports of the Lords debates. Does he know from his close study of them whether their Lordships debated term limits for themselves?

Bob Neill: I do not recall that their Lordships wanted to go into that degree of detailalthough the debate ranged widely and was well informed.
	The Minister makes the legitimate point that it is not a United Kingdom tradition to have term limitsalthough they do occur in other jurisdictionsbut that does not mean that it is wrong to debate the issue. I should add that it is ironic that the Government were unable to muster enough of their own supporters to carry the day, and I hope that the Government will addressthey have not done so thus farthe underlying sense of frustration that too much power is concentrated in the hands of the Mayor.
	Term limits were one solution that found favour in the House of Lords. I would have preferred it if the Government had listened to the alternative that we put forward in earlier stages of the Bill's progress in this House. We wanted to readdress the checks and balances within the structures of the GLA, to give the assembly more hold over the Mayor, the ability to amend the budget and strategies and greater power to call in mayoral directions. That alternative would, perhaps, have sat more easily with our traditions.
	That we will not seek to pursue the Lords Amendment by pressing it to a Division does not mean that we are not frustrated and uneasy that too much power is concentrated in the hands of the Mayor of Londonwhoever holds the postand the particular frustration that the current Mayor has aggravated the situation by the way in which he has used his significant powers.

Andrew Slaughter: It is uncomfortable for me to witness the hon. Gentleman wriggling. We would like to hear why, in combination with the Liberal Democrats, he attempted a coup in the other place, as the only way he thought it would be possible to defeat the current incumbent, from which he is now having to backtrack at an alarming rate.

Bob Neill: I am sorry that the hon. Gentleman's interventions do not become any more considered with the passage of time. What we said in this House was clear, and I restate our position. The wriggling has to be done by those who advocate the current somewhat unbalanced constitutional arrangement within London's devolved structures. The Back-Bench Members who were present throughout the passage of the Bill will know that the Opposition consistently argued that there should be a two-tier strategy to address that, by devolving more strategic powers from central Government to London governanceby getting rid of the Government office for London, for exampleand by redressing the balance between the Mayor and the assembly to create a more constructive partnership.

Andrew Slaughter: Will the hon. Gentleman give way?

Bob Neill: I shall do so once more, and I hope that the hon. Gentleman's intervention will be better this time.

Andrew Slaughter: I simply wish to ask a question: will this set a precedent for the Conservatives? Will there be separate and opposite policies in both Houses as a matter of rule? Labour Members would like to know, because if we are to borrow policies, we will have a choice in that case.

Bob Neill: The hon. Gentleman's intervention was not any better, and I shall not repeat my mistake.

David Evennett: Will my hon. Friend give way?

Bob Neill: I shall give way to my hon. Friend.

David Evennett: My hon. Friend is making a sound and sensible speech. Londoners want there to be checks and balances and for power to be devolved from central Government to the GLA and Mayor, and then down to the boroughs. Surely that is what we should all be supporting.

Bob Neill: My hon. Friend is right. It is important to remember that the boroughs are a third key part of the equation. London governance now rightly consists of a tripartite arrangement between the Mayor, the assembly and the boroughs, and we should be seeking structures that allow those three key elements of London to work constructively together. Their Lordships felt strongly about this issue, and the Mayor brought that change on himself by his own behaviourthe capricious way in which he has used some of his powers.
	This issue was raised in the Lords, and it has come back before us in this House. It is not desirable to look at the situation of the GLA in isolation from the rest of our constitutional arrangements. However, although we will not seek to oppose the Government on this issue, it is sad that they have failed to address the underlying cause by not taking on board sensible amendments to balance the powers properly and to prevent the current discontentwhich it is no good pretending does not existabout how the GLA operates.

Tom Brake: I am pleased to return to this matter, which I raised in Committee. We had much fun with it, and I regret that the hon. Member for Surrey Heath (Michael Gove) is not present to continue that. I suspect that the hon. Member for Bromley and Chislehurst (Robert Neill) has been put up by his party because, in the light of events in the other place, it is easier for him to wriggle than the hon. Member for Surrey Heath, who would have had to try to face both ways on this subject.
	In the other place, my noble Friend Lord Tope expressed very well why it would be appropriate for there to be a two-term limit for the Mayor:
	Local government works on a parliamentary system...where power is shared between a number of people, and the leader, however termed, is elected by the council and not directly by the people.
	He continued that, in relation to the Mayor of London:
	We moved from that system to an essentially presidential system, where one person has all executive power vested in him or her.[ Official Report, House of Lords, 19 June 2007; Vol. 693, c. 116.]
	When the matter was discussed in Committee, a number of hon. Members expressed concern that it was a partisan issue that had been raised to try to unseat the current Mayor. I reassured them that that was not the case, and the concerns expressed were picked up by my colleagues in the other place, who tabled an amendment to make it clear that the provision would not apply to the current incumbent.
	Another issue that was raised, I think by the hon. Member for Hammersmith and Fulham (Mr. Hands), was whether this rule on fixed terms for executive mayors should apply more widely than to the Mayor of London. We cannot debate that in general terms, but as a general principle I think that when a mayor has executive powers, there is a strong argument for their having fixed terms, whether we are talking about the Mayor of London or someone else.
	Labour Members have rightly drawn the House's attention to the fact that there is a split within the official Opposition on this issue. The hon. Member for Surrey Heath was forceful in dismissing this proposal, and it is worth citing some of the more florid phrases used. This is not one of them, but he said that this was
	a proposition that I must concede is flawed...the whole principle of term limits is alien to the British constitution. [Official Report, Greater London Authority Public Bill Committee, 18 January 2007; c. 329.]
	As Labour Members, including the Minister, have pointed out, while we may have evolved a constitution that is allergic to term limits, it would seem as if the other place is not as allergic to them as we are in this Chamber.

Andrew Dismore: I am sure that the hon. Gentleman will correct me if I am wrong, but it was not just the official Opposition who voted for this in the House of Lordsthe Liberal Democrats did so, too. Therefore, he has the same problem of wriggling as the Conservative spokesman and is digging just as big a holeit is big enough for two bendy buses.

Tom Brake: I do not know whether the hon. Gentleman was present during Committee, but we supported the idea of two terms then, as indeed we did in the House of Lords. There is no split within the Liberal Democrats on this issue; we are united on the subject. As for whether we shall choose to press the matter to a Division, it is clear that the numbers are unfortunately against us, and I am all in favour of doing business effectively. It might be that on the next amendment, the Opposition parties will be united, because, as the hon. Member for Bromley and Chislehurst said, the budget is an issue on which the Government could have taken action to address hon. Members' concerns about the Mayor's powers, but they omitted to do so.

Andrew Slaughter: In Committee, I had the privilege of listening to the hon. Gentleman describe, in a moment of rare self-awareness, one of his speeches as not my finest hour. I can assure him that it was, in comparison with the position he is taking today. I am still not clear whether the Liberal Democrats are supporting a two-term limit, including for the current Mayor.

Tom Brake: I thought that I had made it extremely clear that we are in favour of a two-term limit, but that Baroness Hamwee tabled an amendment in the other place, the purpose of which was to ensure that the proposal was not retrospective and thus would kick in after the next mayoral elections. I hope that that reassures the hon. Gentleman.

Andrew Slaughter: As my hon. Friend the Member for Hendon (Mr. Dismore) says, the hon. Gentleman is therefore guilty of exactly the same crime as the official Opposition. In Committee, his line was to have a two-term limit that would apply to the incumbenthe is shaking his head, but he should read what he saidwhereas in the other place, as he says, the position had moved slightly. I assume that the reason for that was that his party had given up any hope of this election and was looking towards the next one, but I hope that he will clarify that.

Tom Brake: I thank the hon. Gentleman. I merely restate the fact that this was not intended to be a partisan amendment seeking simply to unseat the present incumbent. I am confident that on 10 November, when we will announce our mayoral candidate, he or she will be more than a match for the present Mayor and will, along with the Conservative candidate, have great fun in the next six months.
	The proposal would be of huge benefit, because we have moved to a much more presidential system and thus we need to ensure that someone with all the powers and control vested in him or her is not able to continue in post ad nauseam. I hope that I have made it clear that the proposal is not about the present incumbent, with whom I am quite happy, and that the measure would not be introduced retrospectively. However, it should be introduced for future elections and indeed may well need to apply to other executive mayors too.

Mark Field: I regret that my party was associated with this matter in the House of Lords, because it is wholly wrong that there should be term limits at all. In fairness, I suspect that the idea was to generate a debate, perhaps a slightly academic one. My hon. Friend the Member for Bromley and Chislehurst (Robert Neill) made it clear from the Front Bench what our concerns were: that there are potentially too many powers in the hands of the Mayor.
	Certain aspects of power that should be in the Mayor's hands are not, but the continued existence of the Government office for London under the Minister's tutelage is unacceptable, given the devolution that we have had in the capital city during the past seven years. I, for one, have always said that we should abolish the Government office for London and give some powers back to the boroughs and others to the Mayor. That would be the sensible solution for this capital city.
	I take on board what the hon. Member for Carshalton and Wallington (Tom Brake) said. This was rightly intended in a non-partisan way and would not apply to the current incumbent, but such a term limit should not apply at all. I agreed with what the Minister said: this country has no tradition of term limits, nor should we start having them now.

Tom Brake: The hon. Gentleman said that he thought that the official Opposition in the other place had simply raised the matter for debate. Baroness Hanham, speaking in favour of two-term limits, said:
	The position should not become monopolised by any one individual or party...The role requires challenge, renewal and refreshment.[ Official Report, House of Lords, 19 June 2007; Vol. 693, c. 115.]
	Does the hon. Gentleman think that that is simply about engaging in a debate?

Mark Field: To a large extent, it was. I served under Baroness Hanham as a councillor in the royal borough of Kensington and Chelsea, where, coincidentally, I served for two terms, as I believed she did as leader. Perhaps she was putting her money where her mouth was in that particular regard.

Simon Burns: I have been listening carefully to my hon. Friend's thesis. Are the Liberal Democrats not taking an illogical position? Why restrict two-term limits simply to the Mayor of London? Why not, for example, apply them to Members of Parliament, particularly given that the proposal comes from a third-term Member of Parliament?

Mark Field: I shall leave it to the opponents of the hon. Member for Carshalton and Wallington to make that case. On term limits for the leader of the Liberal Democrats, the clock is running quickly for the right hon. and learned Member for North-East Fife (Sir Menzies Campbell), but we shall say no more about those matters.
	The arrangement for the United States presidency is a special situation. The founding fathers had particular safeguards in mind when they decided to have two-term limits for the presidency.

Simon Burns: Will my hon. Friend give way?

Mark Field: I shall give way to a great friend of mine whose knowledge of American politics knows no limits.

Simon Burns: I do not wish to upset my hon. Friend, but I should mention that the founding fathers had no view on the subject. This was a rather nasty proposal made by the Republicans in the 1950s because Franklin Roosevelt had broken the tradition of serving just two terms and had been elected to his fourth term, and they wanted to ensure that no Democrat ever did so again.

Mr. Deputy Speaker: Order. Extending the debate to the outer limits of Chelmsford is one thing, but extending it across the Atlantic is something else.

Mark Field: I know that the loquaciousness of north Essex Members knows no bounds, but I think that we will leave it at that. This country has no tradition of term limits and such a proposal would be highly regrettable. Even in the United States, a number of members of the Senate and Congress have famously served for many decades and many terms of office. I agree with what my hon. Friend the Member for Bromley and Chislehurst had to say, and I hope that we will not support the Lords amendment. If it is pressed to a Division, I shall vote with the Government. We shall see what the Liberal Democrat spokesman has to say about the disreputable suggestion for term limits in this regard.

John Healey: The hon. Member for Bromley and Chislehurst (Robert Neill) set out some general concerns and arguments that he and others have rehearsed during the course of the Bill about the proper balance of power between the Mayor and the assembly within the Greater London authority. There are measures in the Bill to reinforce the hand of the assembly in carrying out its proper scrutiny role in relation to the Mayor. There is the introduction of confirmation hearings and the requirement for the Mayor to have regard to the responses that the assembly may make to consultations and strategies that the Mayor proposes. There is the capacity to amend the budget, which we shall discuss before too long. The Bill is also about building on what has been a successful policy of a strong executive Mayor for our capital city. I make no apologies for that.
	The Liberal Democrats and the Tories, having voted in the other place to try to keep Ken Livingstone out of office, now seem rather embarrassed by the actions of their colleagues in the other place. There has been a good deal of squirming and swivelling on the Front Benches this afternoon. I look forward to seeing how they decide to vote. It is clear from the Conservative Front Bench that the hon. Gentleman has comprehensively disowned the arguments and stance of his colleagues in the upper House. In some ways that gives a new meaning to the process of ping pong between the two Houses. We have a ping pong of Tory policy on this Bill.
	In January the official Front-Bench position of the Conservatives was set out by the hon. Member for Surrey Heath (Michael Gove). He said,
	any attempt to call for term limits will inevitably be seen as an attempt to clip Ken's wings rather than ensure that the principle applies impartially to the mayoral office...we do not believe in term limits in principle or for the Mayor of London. [Official Report, Greater London Authority Public Bill Committee, 18 January 2007; c. 329-31]
	By June the official Conservative Front-Bench position was set out by Baroness Hanham. She said:
	The office of Mayor in this country is now the nearest thing we have to a dictator...the Mayor should be entitled to run for only two terms of office.[ Official Report, House of Lords, 19 June 2007; Vol. 693, c. 115.]
	Clearly, they had come to the conclusion that they could not beat Ken, so they must ban him. I am sorry that we shall not have the benefit of the views of the hon. Member for Henley (Mr. Johnson) on this matter, as he is not in the Chamber at present.
	The argument and the position of the hon. Member for Carshalton and Wallington (Tom Brake) are not strengthened by a special get-out clause for Ken, allowing him to stand this time, but to impose the principle of fixed term limits for the Mayor of London in future. An incumbent Mayor should be able to seek re-election on the basis of his track record and it should be the electoratein this case Londoners across the capital citywho have the right to reject or elect him to serve a further term.

Clive Efford: It is a curious position of principle to suggest that because someone does not like the outcome of a democratic election, they will tinker with the process. As the hon. Member for Henley (Mr. Johnson) has left the Chamber during the debate, can my hon. Friend ask whether the Opposition spokesman will intervene and tell us whether he intends to vote with the Conservative Whip or not? The people of London would have been interested in the views of a mayoral candidate on this particular issue.

John Healey: My hon. Friend is right. Shortly we shall see the decisions that all hon. Members, particularly those on the Opposition Front Bench, make in voting.
	My essential argument is that it remains rightly for the electorate to make this decision. It remains for the incumbent Mayor to stand on the basis of his track record. It remains for Londoners, not Members of this House or the other place, to make this decision. That is the principle that sits at the heart of elected office at all levels in this country.
	I welcome the brief intervention and contribution from the hon. Member for Cities of London and Westminster (Mr. Field). I have long experience of debating a number of matters with him and he is always the voice of reason of the Conservative party. He is right that we have no tradition of fixed terms in this country. I welcome his promise of support for us in the Lobbies on this matter, and I hope that the hon. Member for Bromley and Chislehurst (Robert Neill) will do so too.
	 Lords amendment disagreed to.
	Before Clause 12
	 Lords amendment: No. 2

John Healey: I beg to move, That this House disagrees with the Lords in their Amendment.
	The hon. Member for Bromley and Chislehurst (Robert Neill) touched on the question of the budget and the budget-making process and powers. I can understand the superficial appeal of this amendment. It is reasonable to say that to a detached observer it may seem only fair that an assembly should be able to exercise its power to amend the Mayor's final draft consolidated budget by simple majority rather than the two-thirds majority currently required. However, the principle of the two thirds majority goes to the heart of the governance of the GLAa governance and a model that has served London well since its introduction. I shall explain to the House why that principle is so important.
	The amendment cuts directly across the principle of a strong executive Mayor and an assembly holding him to account for his actions through effective scrutiny. The budget plays a central role in this model. It allows the Mayor to propose a funding package to implement his policies, priorities and proposals. It allows the assembly to amend only if a broad consensusin other words, two thirds of assembly membersare minded to do so. It is an important check and balance on the Mayor. It ensures that he cannot take the assembly for granted in proposing his annual budget, but it is also a clear signal to the assembly that it must work together to amend the Mayor's budget proposals formally.
	I was glad to see that that approach was endorsed by Lord Heseltine in his recent taskforce reports published in June. He recommended that city Mayors
	should be subject to loose scrutiny by the Assembly, who would require a two thirds majority to block executive actions.
	The GLA budget-making process is based exactly on that principle and approach. The Mayor first presents the assembly with a draft budget, which it may amend by a simple majority, and then a final draft budget, which it can amend by a two-thirds majority. That allows the assembly to exert real influence over the Mayor in terms of his budget prioritiesinfluence which the GLA itself acknowledges has saved more than 125 million by reining in, in their terms, the Mayor's budget proposals.
	In contrast, to allow the assembly to amend the final budget by a simply majority would in effect mean the assembly, not the Mayor, would routinely set the GLA budget. It would fundamentally weaken the Mayor's position, which may indeed be the hidden purpose of the amendment, and it risks a complete disconnect, therefore, between the budget and the Mayor's priorities. If hon. Members pause and consider such a position, it is clear that that risks deadlock between the assembly and the Mayor. It risks conflict and an impasse which would be bad for the GLA, for London and for Londoners.
	The debate in the other place has been helpful. It has shed important light on how the budget process has been handled in city hall to date, and on two commonly held misconceptions about the role of the assembly in the budget-making process. The first misconception is that assembly members cannot vote in favour of specific amendments because in doing so they would be voting to accept other parts of the Mayor's final draft budget with which they might disagree. That argument fails to take sufficient account of the provisions of the original Greater London Authority Act 1999. Schedule 6 of the Act makes it clear that the assembly must approve the Mayor's final draft budget, with or without amendment, with a two-thirds majority needed to make any amendment. The Act could not be clearer about the assembly's statutory duties in setting the annual budget. Assembly members have no option to reject the Mayor's final draft.
	The second misconception seems to be that the assembly can amend only the final draft of the GLA consolidated budget, not the component budgets of which it is comprised. Let me reiterate the explanation and the assurance that we tried to give in the other place. The assembly may, if it chooses, amend any one or more of the final draft component budgetsthe budgets of the Mayor, the assembly and the four functional bodies. In so doing, it can amend the final draft GLA consolidated budget, too.
	Hitherto, the annual GLA budget-setting process has not worked in that way. The assembly has voted instead on broad packages of amendments to the consolidated budget as a whole, proposed by each of the main parties; in effect, the assembly votes to accept or reject an alternative budget rather than seeking to amend the Mayor's final draft. That approach is perfectly valid, although I think the House appreciates that it is not one that readily lends itself to cross-party agreement. It should come as little surprise, therefore, that the assembly has not, to date, secured a two-thirds majority for change. However, it is open to the assembly to approach its role in that waydifferently from how it has approached it in the pastand to make the most of its existing powers by forging coalitions of common interest to amend the budget. Surely that is the right way forwardnot making fundamental changes to the successful Greater London authority model, not blurring the currently clear division between executive and scrutiny functions and not, in effect, allowing the assembly to set the budget, thus risking deadlock between the Mayor and the assembly.
	I hope that the debate this afternoon will help to illuminate further some of the misconceptions and that Members will appreciate that the budget-making process, as set out, is a central part of the model in the 1999 Act. I hope that the amendment will not be pressed to a vote, but if it is I ask the House to disagree.

Bob Neill: In our judgment, the other place has clearly and significantly improved the Bill in this case and I hope that we maintain the amendment, because, with every respect to the Minister, he places undue faith in the working of the current model. He suggests that it is a model and a system of governance that has served Londoners well. I am not sure that Londoners whose council tax has increased by more than 100 per cent. during the Livingstone years will regard it as a model that has served them well at all.
	For a model to be effective it is important that it is comprehensible to the electors it serves. Part of the argument advanced for the creation of the Greater London authority was that it would be a more transparent form of governance for the city. However, the budgetary arrangements and the two-thirds majority requirement are manifestly opaque; they bear no relation to anything that happens in local government either in the UK or almost anywhere else.
	It is suggested that the proposal is incompatible with a strong-mayor model. That is not the case. The most obvious example of a strong-mayor model, which is frequently prayed in aid in these circumstances, is the situation in the city of New York, where the city council has the power to amend the mayor's budget by a simple majority. The council has always had that power and several members of the London assemblyI should declare an interest as a memberhad the opportunity to visit New York last year, to talk to members of the budget committee and the mayor's office to see how the budget-setting process worked. At the end of the day, strong mayors have always been able to get the budgets they need to pursue their policies in New York. The idea that the process ends up in deadlock is not borne out by the facts; it is pure scaremongering invented by those who support giving the Mayor altogether too much power, concentrated in one pair of sometimes rather unsteady hands.
	In New York, there have been two successive strong mayors, Rudy Giuliani and Michael Bloomberg, both of whom have been able to get the supply they required through a city council that was between 80 and 90 per cent. Democratthe opposite party to theirs. If they can do it, under a system that requires a simple majority, I am darned sure that any Mayor of London, of any party, can do the same. I am equally sure that the next Mayor of London will have no difficulty in doing so.

Hon. Members: Hear, hear.

Andrew Slaughter: rose

Bob Neill: I shall make a little progress before I indulge the hon. Gentleman.
	It is important that the system is transparent to electors. The average elector thinks the current system is manifestly absurd. The last two of the Mayor's budgets were passed having lost 16 to nine in the assembly. If we asked any citizen of the UK where someone could lose 16 to nine and still win, the answer would be that the only place that could happen would be city hall and the only person who could do it would be the Mayor of London, who had much enjoyment sitting in the gallery shouting Passed every time the assembly defeated one of his propositions. That is the type of jiggery-pokery that brings politics into contempt and disrepute. People see their elected representatives in the assembly, who have as good a mandate as the Mayor, in effect, emasculated. That is not healthy or sensible governance.

Andrew Slaughter: rose

Bob Neill: I give way to the hon. Gentleman who is itching to speak.

Andrew Slaughter: I am most grateful to the hon. Gentleman. I am pleased to see that the hon. Member for Henley (Mr. Johnson) has returned to the Chamber. I thought he might have gone off in a huff, having come to see his opponent disqualified and not received satisfaction from the hon. Member for Bromley and Chislehurst.
	The hon. Gentleman is doing better on this amendment than on the last, although that is merely to damn him with faint praise. The problem with his argument is that it is quite clear why the strong mayoralty was set up with a qualified veto. So far, he has said nothing that detracts from that point.

Bob Neill: Perhaps the hon. Gentleman should have been more patient, because I was dealing first with the lack of transparency. The Government set out transparency as one of their criteria, but have largely departed from it. I shall finalise that point. The process is opaque; it makes no sense to the average citizen that their assembly member and the majority of the assembly voted against a budget that was imposed on them anyway. In fact, for the past three years the assembly budget has been cooked up by a back-door cabal. To get the number of votes he required to block any amendment, the Mayor did a backstairs deal with the Green party. So peculiar was that deal that in its first year it involved him buying the support of the Greens by giving their party money to oppose policies that he was asking the assembly to vote him money to pursue. That is about as bizarre as it could be and if it does not bring politics into disrepute, I do not know what does.
	Such a situation could only happen in Livingstone-land of course, where the logic is entirely different to that which applies to ordinary human beings. It is also far from transparent and hints at another feature of American big-city politics that I hope we do not want to importpork-barrel politicking. That is the risk we run when a budget can be put together by stitching up backstairs deals as happens at present. We want to bring things transparently on to the floor of the assembly and to have the debate there. That is an entirely comprehensible proposition; it works well everywhere else in the UK.
	A final point that is worth mentioning is that the Minister said that, under a strong model, the budget should be amended only when there is broad support for doing so. First, that is not necessary intellectually for a strong mayoral model to work, as has been demonstrated in the American examples; but in any event, like it or notI personally do not, but it is a fact of lifethe assembly is elected under a proportional representation system. Therefore, in fact, to amend the budget, even by a simple majority, it is necessary in practice for more than one party to come together. So a mayor of one party and a completely dominant opposition party in the assembly could not block each other and get into deadlock. In fact, the assembly would have to work on a consensual basis even to achieve a simple majority. That might be a healthy thing.
	The interesting observation that I found from many people in New York, both officials and consumers, when I discussed their budgetary process was the fact that a measure of creative tension was judged not a bad thing, because it also required the mayor and the city council to work in sensible partnership. That would be an altogether more mature and healthier situation for governance in London.
	The Government are therefore wrong to seek to disagree with the Lords amendment. The Lords were wise in asking us to reconsider. Their amendment improves the Bill, and we will certainly resist any attempt to remove it.

Tom Brake: Again, I am pleased to return to this matter, which was debated at greater length than any other in Committee and, of course, picked up in another place.
	As the hon. Member for Bromley and Chislehurst (Robert Neill) has said, the Minister and other Government Members have suggested that this budgetary arrangement has served Londoners well. However, as the hon. Gentleman has pointed out, the fact is that the Mayor's precept of the council tax has increased by 100 per cent. in four years, and most Londoners would say that that does not serve them very well. For that reason, we proposed a measure in Committee that would have increased transparency and allowed separate billing for the Mayor's precept, so that when people received their council tax bills and complained about the fact that their local councils had put up their council tax by 4 or 5 per cent, or by something above the rate of inflation, they would also receive a bill setting out the Mayor's precept. They would then be able to see that the Mayor had very generously put up his precept by 25 per cent. or by something of a much larger nature than the local authorities had done. I am afraid that, of course, the Government were not in favour of transparency in billing. Therefore, many people remain in the dark about how generous the Mayor has been with their council tax.
	We have reached very strange times when the Minister feels the need to invoke Lord Heseltine's view as a justification for supporting this budgetary arrangement. It is in fashion for the Government to adopt things, but they are going to the extent of adopting Lord Heseltine's view in defence of their proposal. As the hon. Member for Bromley and Chislehurst has said, no one outside the House or the Mayor's office will understand a budgetary arrangement whereby a budget can be passed when 16 assembly members vote against it and nine support it. No one would see reason in that sort of arrangement. That is why, if the official Opposition choose to press the motion to a vote today, we will certainly join them. The budget and the Mayor's ability to push his budget through with minimal support goes to the crux of what is wrong with the present arrangements.
	The Minister said that requiring a majority to support the budget risks conflict and impasse. I do not agree at all. What it risks is the Mayor having to sit down and agree with a majority of assembly members in the different parties that they will support his budget. That arrangement seems to work quite well in local authorities throughout the country, where Conservative and Liberal Democrat administrations, Liberal Democrat and Labour administrations or, quite possibly, Conservative and Labour administrations work together and reach arrangement on budgetary issues and policies. We should not be afraid of that, but it seems as though the idea that the Mayor of London should have to achieve a consensus with assembly members is so appalling and alarming to the Government that they cannot possibly entertain it.
	We think that this is a matter of huge importance. It is probably the most important issue that we need to address to try to make the whole process more democratic, more accountable and more open. We sincerely hope that the motion will be pressed to a vote and that we can command a majority of support against the Government, so that we in the House adopt what was sensibly proposed in the other place to ensure that the budget must be passed by a majority.

Mark Field: The Minister is right when he says that we want a strong executive Mayor. I share and understand some of the concerns that he has expressed about the problems that might arise with deadlock, which would be in no one's interest, not least the people of London. However, it might have ensured that some of the Mayor's profligate spending in the past seven years was kept in check. As a number of hon. Members have rightly suggested, the mayoral precept has gone up by well over 100 per cent. In fact, it has almost increased by 180 to 200 per cent. since the mayoralty came into being.

Tom Brake: The hon. Gentleman mentions deadlock. When I asked the officers of the Conservative-Liberal Democrat administration in Birmingham whether deadlock was causing a problem in regeneration issues, for instance, they said, No, things work perfectly well.

Mark Field: The hon. Gentleman is absolutely right. Of course, there are many examples across the country of those in coalition local authorities working well together. However, there are other examples of where such arrangements have not worked well and where the situation is much more unstablenot least, obviously, where elections take place annually, rather than every four years.
	As someone who lives in the city of Westminsteras other hon. Members do, and the hon. Member for Regent's Park and Kensington, North (Ms Buck) is hereI know that we council tax payers in Westminster now find that more than half of our council tax is due to the mayoral precept. Yet the Mayor is responsible for cleaning not a single street, emptying not a single bin or running not a single school or social services department. That enormous amount of money is spent in what we regard to a large extent as a fairly unaccountable way, because of the way in which the system works for the GLA. That is the reason why we would like a simple two-thirds majority to be used, and I hope that that case was made very powerfully by my hon. Friend the Member for Bromley and Chislehurst (Robert Neill).
	The Government are almost trying to get a double lock. Of course, the whole system for the GLA was set up to ensure that there was not a single majority party. My own party won nine of the 14 first-past-the-post seats at the last GLA elections and the Labour party won five seats at that juncture, compared to eight and six in the first elections in 2000. As a result, a lock was put in place, with 11 of the members being on a top-up proportional representation basis from the Liberal Democrats, the Green party and UKIP or Veritas. The lock was designed to ensure that no party had a majority, yet the two-thirds arrangements make it almost impossible for a sensible discussion to take place with any Mayor who digs his heels in on budgetary matters.
	Given the arrangements for proportional representation in the GLA, a simple majority would be a sensible way forward. That would not necessarily lead to deadlock. Inevitably it would require a Mayor to slash certain aspects of his budget, but that would be done through the usual negotiations in politics. That would be an acceptable way forward for the people of London.
	The biggest concern of many of my constituents is the budgetary considerations of the mayoralty, which are getting out of control. It would be undesirable for more than half the council tax of other London boroughs to be in the hands of a largely unaccountable GLA and mayoralty. We want to consider other issues related to the powers of the mayoralty, which we discussed earlier. We hope the Government will ensure that there is a proper democratic safeguard for budgetary arrangements in the GLA.

John Healey: As I tried to explain to the House, and as the hon. Member for Cities of London and Westminster (Mr. Field) has just urged, there is a democratic safeguard in the current arrangements. It is in the original 1999 Act and has worked well to date. The Lords amendment would undermine, not reinforce, that.
	In his comments about New York, the hon. Member for Bromley and Chislehurst (Robert Neill), speaking from the Conservative Front Bench, illustrated why it is not possible to translate the models of other cities to our circumstances, and why it is important that we continue to fashion the arrangements that are appropriate for our political tradition and our capital city. He cites New York and the budget-making process there, but he knows that there are almost three times as many members of the New York city council. He knows, because he has discussed the matter before with my hon. Friend, that those members have only a local mandate and that generally, when they seek to challenge the mayor of New York's budget, they do so because they are pursuing support for local issuesprecisely the sort of risk of pork-barrel politics that the hon. Gentleman is so keen to avoid.

Bob Neill: Can the Minister help me on two short questions? First, in our tradition and process, where is there any example of a two-thirds majority being required to pass a budget? Secondly, is he aware of the evidence given by organisations in New York that the situation there has
	never caused any gridlock in the New York political process?

John Healey: The point that I was making is that the New York model does not translate. Instead of all members of the city council, as in New York, having local-only mandates, 11 out of the 25 members in London have a city-wide mandate, without a constituency mandate. In terms of the general approach to mayoral systems, in other parts of the country where they exist, they largely replicate the one that we have in London.

Bob Neill: Is the Minister saying that there is any other city or town in the United Kingdom which has a directly elected mayor where the local council requires a two-thirds majority to amend the budget?

John Healey: Yes.
	The hon. Gentleman went on to talk about back-stairs deals. One could look at the budget process and the way that the Mayor has managed it in those terms, but one could also look at it as effective coalition buildingprecisely the thing that the Opposition parties have failed to do in the budget process. It is reasonable to see the role that the Greens have played as an example of the way in which assembly members can and do effectively influence the Mayor's budget priority through the budget-making process.

Bob Neill: rose

John Healey: Does the hon. Gentleman wish to come back?

Bob Neill: It will be the last time. I would be grateful if the Minister would clarify a comment that he made earlier, when I asked him whether there was any town or city in the UK where the council had to pass the budget by two thirds. Can he tell us?

John Healey: YesDoncaster, Watford, Hackney.
	I return to the point that I was making. Out of the 25 elected Assembly members at present, nine are Conservative and five are Liberal Democrat. It is simple maths to calculate that already there is a simple inbuilt 50 per cent. majority if the two parties co-operate. That leads me to my earlier argument. If the majority were set as a simple majority for amending the final budget, it would routinely set the Mayor against the Assembly, it would undermine the authority of the Mayor in the budget-making process, it would fundamentally weaken his position, and it risks a complete disconnect between the elected Mayor's priorities for the city and the budget-making process.

Tom Brake: Will the hon. Gentleman give way?

John Healey: No. I am sorry. I am finishing on that point.
	For the reasons that I have set out, I urge my hon. Friends to disagree with the amendment made in the other place.

Question put, That this House disagrees with the Lords in the said amendment:
	 The House divided: Ayes 278, Noes 165.

Question accordingly agreed to.
	 Lords amendment disagreed to.

Clause 22
	  
	The health inequalities strategy

Lords amendment: No. 3.

John Healey: I beg to move, That this House agrees with the Lords in the said amendment.

Madam Deputy Speaker: With this we may discuss Lords amendments Nos. 4 to 9.

John Healey: We have reached a group of amendments that the Government tabled in the other place in response to the debate that took place there and in this House. The amendments constitute useful additions and, in some places, important strengthening of the provisions. I pay tribute to hon. Members in both Houses who helped us to frame them and I look forward to discussing them this afternoon.
	I shall deal first with the amendments that relate to health. Amendment No. 3 inserts the London boroughs and the City of London into the list of bodies and persons whose role in implementing the health inequalities strategy the Mayor must describe. Inclusion of the boroughs in the list also results in their being consulted by the Mayor during the early rather than the final stages of developing the strategy. That is sensible, because they have an important role to play in helping pursue the strategy.
	Amendments Nos. 4 and 5 seek to improve the drafting of the provisions about general health determinants in proposed new section 309F(5).
	Amendment No. 7 is a minor drafting change, which simplifies the process of consultation on the Mayor's health inequalities strategy.
	Let me consider the amendments on housing. The Bill already contains provisions that require the Mayor to consult the London boroughs, the Corporation of London and any other person who is considered appropriate on the London housing strategy. That is in line with arrangements for other London strategies for which the Greater London Authority Act 1999 provides. However, uniquely, delivery of the London housing strategy will be heavily dependent on the Housing Corporation and registered social landlords. Amendment No. 8 therefore introduces an explicit requirement for the Mayor to consult the Housing Corporation and bodies that represent registered social landlords on a new or revised London housing strategy.
	I hope that the amendments make sense. It is clear to me that they will improve the process of preparing and delivering the strategy and I commend them to the House.

Bob Neill: The Minister and I are in accord on the amendments and I am grateful to him for the spirit in which he moved them. I agree that they are sensible and improve the Bill. They attracted support from all quarters when they were discussed previously.
	I highlight amendment No. 3 because I especially welcome the recognition of the role of the London boroughs in health matters. As I said in an earlier debate, it is important to stress the importance of partnership between the Mayor and the boroughs from the earliest possible stage. I wish that the Mayor would sometimes recognise that as much as the amendments do. However, given the spirit in which the amendments have been moved, we are happy to accept them.

Tom Brake: I, too, support the amendments. If I were being churlish, I would question the reason for missing out local authorities the first time from the health inequalities strategy, given their prominent role in sport, care for the elderly and so on. However, I do not want to be churlish, so I simply emphasise that I support the amendments.

Mark Field: Like other hon. Members, I support what the Government are trying to achieve. However, in view of the many planning measures that will be introduced, I hope that there will be a culture of greater transparency, especially on housing-related matters. I speak with a constituency interest in mind about the large-scale development in the Victoria area. There is grave concern among my constituents that a deal has been done between Transport for London, which is under the Mayor's auspices, and the developer, Land Securities, for some 270 million. Consequently, the current proposal is that there will be no social or affordable housing on the site. All residents in the Victoria area greatly regret that.
	I appreciate that I have raised a specific issue and that we are at an early stage in the process. I wanted to make the simple point to the Minister that, on housing negotiations between the Mayor, housing authorities and the Housing Corporation, greater transparency is vital as far as that is possible. I appreciate that much of the lack of transparency is institutionalised in the planning regime, particularly given the manner in which section 106 agreements operate, which many of us in the House and those who have served as local councillors regret. However, I hope that the point will be borne in mind in this Bill and in other legislation that the Government bring forward.

Clive Efford: The hon. Gentleman has spoken with a great deal of common sense in this debate, although we were on opposite sides about the Mayor's accountability for the budget. He has shown great attention to detail on the Bill, so will he tell the House whether he was overlooked as a candidate for Mayor or whether he was rejected in the selection process? Unfortunately, the Conservative party's candidate for Mayor does not seem to have a view on anything in the Bill

Madam Deputy Speaker: Order. I am not sure that the remit of the amendment includes who or who is not being considered as a candidate for Mayor.

Boris Johnson: Perhaps I could just say that I want very much to echo what my hon. Friend the Member for Cities of London and Westminster (Mr. Field) has said. In supporting and welcoming the spirit of the amendment, I think that I speak for a lot of people in this Chamber when I say that anything that encourages more co-operation and consultation between the Mayor and the boroughs is a good thing. I therefore think it wholly right that we should

Andrew Dismore: Will the hon. Gentleman give way?

Madam Deputy Speaker: Order. The hon. Gentleman clearly is not giving way at this moment.

Clive Efford: On a point of order, Madam Deputy Speaker. If an hon. Member is going to make a contribution in such a debate, should they not at least know what is under discussion?

Madam Deputy Speaker: I think that that will become evident from the remarks that they make.

Boris Johnson: I think that everybody in the House wants to see a mayoralty that responds to the wishes of local communities and that works with the boroughs and not against them in imposing planning decisions that go against the wishes of locally elected politicians. That is exactly the direction in which the amendment is going and that is why I approve wholeheartedly

Andrew Slaughter: rose

Madam Deputy Speaker: Order. The hon. Gentleman is clearly not giving way at the moment. Have you concluded your remarks, Mr. Johnson?

Boris Johnson: I have.

John Healey: I welcome the hon. Gentleman to the debate. We missed his contribution and his presence in earlier debates. May I tell him that he was in fact speaking to the next group of amendments? We are talking about housing strategy and health, but we will come to planning next. I hope that he will stay and contribute to that debate as well.
	 Lords amendment agreed to.
	 Lords amendments Nos. 4 to 9 agreed to.

Clause 31
	  
	Duties in relation to consultation

Lords amendment: No. 10.

John Healey: I beg to move, That this House agrees with the Lords in the said amendment.

Madam Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 11 to 16.

John Healey: In this group we propose a number of amendments to the planning clauses of the Bill, following useful and valuable scrutiny undertaken in this House and the other place.
	Lords amendment No. 16 introduces new clause 2E, which introduces into the Bill the requirement for the Mayor to give the local planning authority and the applicant an opportunity to make oral representations to him about a development proposal. It is designed to do what the hon. Member for Cities of London and Westminster (Mr. Field) was urging, namely to make the planning process more open and transparent. It further requires the Mayor to prepare and publish a document setting out any other persons from whom he will hear oral representations, the procedures that he will follow for considering oral representations and the arrangements for identifying the factual information that is agreed by the parties. I hope that the House will welcome this approach.
	Lords amendment No. 16 also requires the Secretary of State to apply, by order, the terms of the Local Government Act 1972. Those requirements will ensure that representation hearings are open to the public and that the public have access to agendas and reports. That is designed to ensure that mayoral decision making in the process is as open and transparent as that of borough planning committees. We will apply those requirements through a Mayor of London order, a draft of which I have already made available to the House.
	On a wider point, which is none the less directly connected to the amendments, we have made it clear throughout the passage of the Bill, in this House and in the other Place, that decisions on applications should be taken by the boroughs wherever possible. Indeed, our proposals expressly provide for that. It is important that the Mayor takes only the decisions that it is appropriate for him to take. Lords amendment No. 12 makes an important change to give further effect to that principle. It will provide an express power for the Mayor to pass the decision making back to the relevant borough on subsequent applications for the approval of reserved matters or the approval of details under a listed building consent, where he has already determined the earlier outline application. That new provision, alongside clause 33, will ensure that decisions on all applications are taken at the appropriate level.

Charles Walker: As someone who did not serve on the Bill Committee I am perhaps not as au fait with this matter as I should be. Will the Minister give the House a couple of scenarios in which the Mayor might get involved?

John Healey: The provisions in the Bill allow for the Mayor to get involved in major developments and applications that might have a wider, strategic significance. In the amendments, and in the Bill, we are keen to ensure that decisions are taken at the appropriate level, and that wherever appropriate local boroughs continue in their role as the planning authority. The amendments in this group, which we passed in the other place, strengthen that principle and put in place for the future a more balanced system that will serve London well.

Bob Neill: I should like to deal with the detail of the amendments fairly briefly, before coming to the underlying principle, on which our stance is different.
	I do not quarrel with the detail of the amendments that the Minister has put forward. It is obviously right and sensible to place the requirement in Lords amendment No. 16 in the Bill. We argued for that in Committee and I welcome this recognition of our argument. However, that does not alter the fact that we thoroughly dislike the principle underlying the amendment, namely that the Mayor should have the ability to take planning applications away from the boroughs and decide on them centrally. In our judgment, that is a profoundly anti-localist, anti-devolutionary measure. The amendment at least makes the operation of an undesirable system more acceptable in regard to practical issues, so we will not seek to oppose it, but that does not for one second mean that we think that this is a wise course of action for the Government to embark on.
	On Lords amendment No. 12, although it is perfectly sensible to pass back issues of detail on reserved matters, the underlying principle of letting the Mayor get involved in the first place is, in our judgment, flawed. The degree to which the Bill will allow the Mayor to interfere in planning matters far more than before is a much greater recipe for conflict than any of the issues concerning the budget and the Mayor and the assembly that we have discussed. The history of London government is full of tension and conflict between the upper tier and the boroughs. That was so with the old Greater London council and elsewhere.

Lee Scott: Does my hon. Friend agree that the amendment, however helpful in improving the position, does not lend itself to the task of trying to involve local people in local decisions? It puts the Mayor in a position to override local wishes, which, franklyunlike the future Mayor, my hon. Friend the Member for Henley (Mr. Johnson)he could not care less about.

Bob Neill: I agree with my hon. Friend. A regrettable fact of London life is that the Mayor has not approached planning matters with anything like the spirit of reasonableness and restraint that the Minister displays in speaking to these amendments today. I regret to say that I have no confidence that the current Mayor will use these powers with the degree of restraint and sensitivity that the Minister clearly hopes for. Again regrettably, the evidence of the Mayor's behaviour so far is very much to the contrary. We have seen too many examples of worthwhile developments in London being delayed and potentially prejudiced by the Mayor's needless interference, which is not in Londoners' interests.
	With a very large caveat, we will not seek to oppose the amendments; we recognise that they provide amelioration of a system that we believe is flawed in principle. At some point, a future Governmenta Conservative Governmentwill have to return to effect a better balance in achieving planning policy in London.

Tom Brake: I echo the hon. Gentleman's points. What the Government are proposing will certainly improve a flawed system, but that system remains flawed and the concerns raised in this House and the other place about the Mayor's planning powers continue to be held. Regrettably, the amendments will not change that situation in any respect. We will not oppose them because they at least slightly improve the flawed system.

Mark Field: We have rehearsed on several occasions in the House and in Committee our concerns about strategic powers and, more precisely, what a strategic planning power means for the Mayor. We are not entirely satisfied and we will have to see how the system operates over a period of time before we can move forward.
	I would like the Minister to comment on this narrow point. How does he view the operation of appealsdirect appeals by the public or resident associations? How will appeals operate as between local boroughs and the Mayor, and what of the ultimate right of appeal to the Government inspector? Does he envisage that where the Mayor has called in a particular planning application, it will preclude central Government from doing so under any circumstances, or will there still be a safeguardand perhaps further complication and delayin the hands of central Government to call in such an application? From the perspective either of developers or of local communities that want a particular development in their area, it would be highly undesirable if the process led to yet another layer of delay and bureaucracy. Does the Minister envisage that where the Mayor calls in an application in London, central Government will not do so?

John Healey: I welcome both Opposition parties' support for the amendments, if not for the broader principles, relating to this part of the Bill. The system is very complicated, so I will write in response to the hon. Member for Cities of London and Westminster (Mr. Field) to provide the detail that he requests.
	 Lords amendment agreed to.
	 Lords amendments Nos. 11 to 16 agreed to.
	After Clause 36
	 Lords amendment: No. 17.

John Healey: I beg to move, That the House agrees with the Lords in the said amendment.
	In the other place, the Government agreed to consider, along with interested parties, the best way to implement our commitment to a London waste recycling forum and fund. As a result of those discussions and further consideration, we decided to put the body managing the fund on to a statutory basis. The argument was strongly put to us that the advantage of doing so was that that would provide greater stability and focus and help to ensure that the fund was deployed in the best interests of London at all levels. Ultimately, we took the view that that approach had the advantage over a voluntary system, in that it provided a legal certainty for the basis on which the fund is paid and administered.
	The board's objectives will be to promote more sustainable waste management. To achieve those objectives, it will be able to spend money, including giving grants, and to provide advice on relevant matters to London boroughs, the Mayor and others. The London waste and recycling board will not be a waste authority. We propose that it will act in accordance with the Mayor's municipal waste management strategy and in general conformity with the London spatial development strategy. In that way, it recognises that the vision and strategy for London's waste is the Mayor's, and that action will have to take place in accordance with that. I see the hon. Member for Bromley and Chislehurst (Robert Neill) nodding his approval of that.
	The board will also have the power to assist boroughs in the performance of any of their waste functions. Many interests in London, including the boroughs, are keen for us to move on that. We therefore propose to set out the details of the membership, constitution and administration of the body as soon as we can after the Bill receives Royal Assent. I commend the amendment to the House.

Bob Neill: I am grateful to the Minister for his introduction of the amendment. As he said, I welcome the Government's approach, as it seems to the Opposition a sensible and pragmatic way forward. I am glad that the Government did not listen to the blandishments of the Mayor of London and some of his supporters who lobbied immensely hard during the passage of the Bill for the creation of a single London waste authority under the Mayor's control. In our judgment, that would have been a needless level of bureaucracy. I am glad that we have this sensible way forward, which recognises the importance of the Mayor as the strategy setter and the boroughs as the principal delivery agents.
	Unfortunately, the one person who does not seem to be prepared to play ball with that sensible approach is the Mayor, who used his last press conference extraordinarily and petulantly to announce that, because he did not like the composition of the waste board, he would not chair it or contribute the 6 million to which he had previously agreed. As the Minister will know, and the House should know, the board is to be funded to the tune of 25 million, with 19 million coming from the Government and 6 million from the Greater London authority. If anything more aptly demonstrates the unfitness of the current Mayor for office, it is his childish, arrogant and destructive attitude towards the establishment of the board. He has effectively said, I don't like what I've been given, and I'm going to take my toys away, which demonstrates his unwillingness to tackle serious issues. He wanted something that gave him more power, but this is a sensible compromise, as all parties in the House recognise. If he is to serve the interests of London seriously, it behoves him to try to work with what he is given and pull things together.
	In that context, will the Minister tell us how the Government intend to deal with their unruly childthe Mayorand bring him to heel and into co-operation? I appreciate that that is like asking the Minister how he herds cats, but I will none the less press him a little on the matter. I welcome the intention to set up the board and am grateful for the Minister's confirmation of that. I look forward to hearing the detail of the shadow board in due course. How do the Government propose to deal with the negative impact on waste and recycling in London of the Mayor's apparent lack of co-operation? What do they intend to do about the potential 6 million funding gap, due to the Mayor's petulance? Are there means by which the Mayor can be made to keep to the bargain, as he should be? If not, how would the funding be made up? Is recycling in London to suffer because of the Mayor's petulance?
	Will the Minister also confirm that the setting up of the board will be dealt with through a statutory instrument? If so, when will that be made available?

Tom Brake: I am pleased that the Mayor will not control collections, because I think that that should be the boroughs' responsibility. We should welcome the fact that boroughs are being given the potential to develop schemes of their own, and to identify best practice that can then be spread to and maintained in other boroughs.
	Subsection (4) states:
	For the purpose of achieving its objectives, the Board may provide advice on such matters
	matters, that is, relating to waste and recyclingto
	(a) the Mayor;
	(b) any London borough council;
	(c) the Common Council;
	(d) such other persons as the Board thinks fit.
	I wonder whether the Government considered identifying business in a separate subsection. Local councils now understand the need to recycle; the biggest challenges may lie with business.
	Picking up a point made by the hon. Member for Bromley and Chislehurst (Robert Neill), may I ask whether the Minister has had time to assess the impact of the Mayor's withdrawal of funds? Has he a view on what will have to be cut, or will not be done, as a result of the Minister's spitting out his dummy and withdrawing 6 million from the board?

John Healey: I mentioned the implementation order in my opening remarks. We intend to introduce it as soon as possible after Royal Assent, and it will include membership of the board.
	As for the Mayor's role, it has been our consistent belief that the board will benefit from the strategic direction of the Mayor as chair. It has also been our consistent view that the board and its functions will help to produce a significant change in waste management operations and recycling performance across London. Ultimately, however, the Mayor's participation is a matter for him.
	 Lords amendment agreed to.

Clause 38
	  
	Planning contribution under section 46 of PCPA 2004

Lords amendment: No. 18.

John Healey: I beg to move, That this House agrees with the Lords in the said amendment.

Madam Deputy Speaker: With this we may discuss Lords amendments Nos. 19 to 29.

John Healey: We propose a number of amendments to the climate change clauses, following valuable scrutiny of the Bill in the other place. They are intended to sharpen the consideration and priority that the Greater London authority gives to climate change in exercising its functions.
	I shall try to deal with the amendments fairly briefly. Among the most significant is amendment No. 18, which requires that in considering whether or how to exercise the authority's general power, the Mayor must have regard to the effect that that would have on climate change and its consequences in general and global terms, as opposed to only in relation to Greater London. In view of the nature of climate change, I think Members in all parties will accept that it stands to reason that the Mayor should have regard to climate change issues beyond the boundaries of the Greater London area.
	Amendment No. 19 requires the Mayor, when exercising the authority's general power, to do so in the way that is best calculated to contribute to the mitigation of or adaptation to climate change in the United Kingdom.
	Amendment No. 20 introduces a new clause placing a duty on the Mayor to have regard to climate change and the consequences of climate change in either preparing or reviewing his various strategies. Amendments Nos. 23 and 29 give the Mayor the flexibility to go beyond national policy on climate change mitigation, while ensuring that his strategy is not inconsistent with national policies. The amendments will also require the Mayor to act within the boundaries of national energy policy objectives, although the use of the word objectives underlines that we are seeking the Mayor's assistance with high-level goals of energy policy such as security of supply and more competitive energy markets, rather than his assistance or conformity with specific national policy measures.
	Amendments Nos. 24, 25, 26 and 28 require that the London climate change mitigation and energy strategy should contain information on levels of relevant emissions and include the Mayor's proposals and policies for minimising emissions of other significant greenhouse substances in addition to carbon dioxide.
	Amendment No. 27 requires that, in setting out the policies and proposals in the strategy for supporting innovation and encouraging investment in energy technologies in Greater London, the Mayor must have regard to the desirability of advancing energy technologies that involve the emission of lower levels of substances that contribute to climate change. We recognise that the Mayor is likely to want to focus on low-carbon technologies. After all, carbon dioxide is the major contributor to climate change, but we want to keep open the possibility that he might also support technologies that are important to other energy goals.
	I commend the amendments to the House.

Bob Neill: I am grateful to the Minister for the way that he has introduced the amendments. We have no issue with them; they are sensible amendments. The point about climate change knowing no boundaries is obviously well made. Various independent bodies have made the valid criticism that some of the other mayoral strategies have been, if anything, too inward looking and have not had enough regard to London's impact on the rest of the south-east. I hope that that sensibly broader approach will be something of a precedent for the way in which the Mayor deals with other statutory strategies that he has. The London plan is one that was criticised for being a bit too London-centric and for not looking enough at the linkages. Therefore, the provision is a step in the right direction in that regard.
	I welcome the fact that the Government are adopting a fairly high-level and light-touch approach to their requirements of the Mayor in relation to those strategies. That could profitably be employed for the requirements that the Mayor has of the boroughs in relation to his other strategies.

Tom Brake: I support the amendments without equivocation. As the Minister said, they are about sharpening the consideration and priority of issues to do with climate change, which we support. In Committee, our concern was that the Mayor was going to be held back in relation to what he could do for climate change because of the linkage with national Government policies. Therefore, I welcome the additional flexibility that the Mayor has been given in that respect.
	 Lords amendment agreed to.
	 Lords amendments  Nos.  19 to 29 agreed to.

Clause 49
	  
	Orders

Lords amendment: No. 30.

John Healey: I beg to move that the House agrees with the Lords in the said amendment.

Madam Deputy Speaker: With this it will be convenient to take Lords amendment No. 31.

John Healey: Both amendments respond to recommendations from the Delegated Powers and Regulatory Reform Committee. It is right that they do so. They have been welcomed in the other place and I hope that they will be supported by hon. Members.

Bob Neill: Suffice it to say that we agree with the Minister and have nothing to add.
	 Lords amendment agree d to .
	 Lords amendment No. 31 agreed to.
	Schedule 1
	 Lords amendment: No. 32

John Healey: I beg to move, that this House agrees with the Lords in the said amendment.

Madam Deputy Speaker: With this we may discuss Lords amendments Nos. 33 and 34.

John Healey: Confirmation hearings, as set out in schedule 1 to the Bill, provide an important new power for the Assembly to exercise scrutiny over the important appointments that the Mayor makes. We have listened to arguments and concerns to ensure that the Assembly has sufficient time within the specified three-week period to exercise its proper role in carrying out confirmation hearings. The amendments ensure that the Assembly in all circumstances, including immediately after an election, will be able to do so. It also makes minor changes to improve the process by which decisions over confirmation hearings may be taken. I hope again that they will command the support of the House.

Bob Neill: We accept the Minister's sensible amendments. The principle of confirmation hearings is, I concede, an area of the Bill where there is a step forward, which is welcome, but it does not go far enough and we would like to have strengthened the measure and extended the range from the previous debates. However, it would be churlish not to welcome the acceptance of the principle, which I hope can be built on in the future. My final comment on the Bill will be that, as the Minister knows, our stance is that there are a number of missed opportunities and that there is unfinished business to which a future Government will have to return.

Tom Brake: I support the amendments with the same caveats about confirmation hearings. When we debated the matter in Committee, we were keen to see an extension to the range of people who could be subject to confirmation hearings. That has not been the case but we support these individual amendments.
	 Lords amendment agreed to.
	 Lords amendments Nos. 33 and 34 agreed to.
	Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments Nos. 1 and 2: Tom Brake, John Healey, Chris Mole, Robert Neill and Mr. Dave Watts to be members of the Committee; John Healey to be the Chairman of the Committee; Three to be the quorum of the Committee. [ Mr. Watts. ]
	 To withdraw immediately.
	 Reasons for disagreeing to certain Lords amendments reported, and agreed to; to be communicated to the Lords.

FURTHER EDUCATION AND TRAINING BILL [ LORDS] (PROGRAMME) (NO. 2)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A (Programme motions),
	That the following provisions shall apply to the Further Education and Training Bill [ Lords] for the purpose of supplementing the Order of 21st May 2007 (Further Education and Training Bill [ Lords] (Programme)):
	 Consideration of Lords Message
	1. Proceedings on consideration of the Lords Message shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement at this day's sitting.
	 Subsequent stages
	2. Any further Message from the Lords may be considered forthwith without any Question being put.
	3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement. [Liz Blackman .]
	 Question agreed to.

Further Education and Training Bill [ Lords]

Lords message considered.
	 Lords Reasons: Nos. 1A, 2A, 4A, 6A, 7A and 8A.

Bill Rammell: I beg to move, That this House does not insist on Commons amendments Nos. 1, 2, 4, 6, 7 and 8 to which the Lords have disagreed, but proposes amendments (a) to (f) to the Bill in lieu of the Commons amendments.
	In July, the House sent the Bill to another place with amendments, following a period of intense scrutiny. The amendments, which addressed our intention to intervene in unsatisfactory further education provision, were disagreed to in the other place, which gave as its reasons:
	Because the proposed delegations of powers of intervention are inappropriate.
	The Government do not agree with that statement. We believe that there needs to be clarity and certainty about the proposed powers of intervention and, further, that in England they should be exercised by the Learning and Skills Council, as the funding and commissioning body for further education there. In Wales, the proposed powers of intervention would be exercised by Welsh Ministers; there is no equivalent of the LSC in Wales, and Welsh Ministers are responsible for the planning and funding of further education in Wales.
	However, we reflected on the valuable debates, and particularly the contributions of those who urged the need to make sure that there are appropriate checks, particularly in the system we are proposing for England. In that context, I would like to express my appreciation of the constructive work that the hon. Member for South Holland and The Deepings (Mr. Hayes) has done with us to prepare a robust solution for the sector. I held discussions on the amendments, and he influenced them; that offers a model of how Government and Opposition can, and should, work together where we can. I also pay tribute to the hon. Member for Brent, East (Sarah Teather), who has played a constructive role as well.
	In response to concerns raised by the hon. Member for South Holland and The Deepings and others, we have already made significant changes to the provision on interventions, including requiring the LSC and Welsh Ministers to consult on their proposed statements about how they will exercise their statutory intervention powers, and in the case of the LSC to get the statement approved by the Secretary of State. Statements approved by the Secretary of State will be laid before each House; Welsh Ministers must lay statements of their policy before the National Assembly for Wales. We have also limited the power in relation to dismissal of senior post holders so that it is now to direct a governing body to initiate dismissal proceedings, and we have made a number of non-statutory changes to address concerns that have been raised.

Jeremy Wright: It is refreshing that a Minister in this Government has the grace to concede that he has accepted a Conservative approach, and we are grateful to him for that. However, I seek reassurance on a specific point: if a member of staff is dismissed as a result of a process initiated by the LSC, is there in his view clarity on the legal position if they were to sue for unfair dismissal?

Bill Rammell: Yes, I believe that that clarity does exist. One of the bodies that has been particularly pressing us on this issue is the Association of Colleges, which represents colleges throughout the country. The last time we discussed the Bill, it was satisfied with the changes we had made.
	However, the amendments now proposed by the Government go further still. They propose that the Bill require the LSC to give notice to the Secretary of State before exercising any of the statutory intervention powers. It would not be appropriate to specify in statute which Secretary of State the LSC should notify, but it is likely that in most circumstances that notice would be given to the Secretary of State for Innovation, Universities and Skills and, where the education or training of 16 to 19 year olds was affected, the notice would be copied to the Secretary of State for Children, Schools and Families.
	At that point, if the Secretary of State considered that what the LSC was proposing to do was inappropriate, he would be able to take action using, as appropriate, his powers under either proposed section 56C of the Further and Higher Education Act 1992, or section 25 of the Learning and Skills Act 2000. The process for intervention would enable a governing body that considered that the LSC was not following its published statement about how it would exercise its statutory intervention powers to make a complaint to the LSC. If the governing body was not satisfied with the response, it could set out its concerns in writing to the Secretary of State. That gives a significant degree of further reassurance.
	I also want to give the House a commitment today that where the Secretary of State received notice of the LSC's intention to exercise its statutory intervention powers, he would write to local MPs, notifying them of the situation. That would be done on a personal basis, to protect those institutions where the possibility of intervention was not in the public domain.
	The amendment that we are proposing and the commitment I have given directly address the issues raised in another place. They enhance the accountability that the LSC already has. They make it clear to Parliament and the further education system that Ministers will be keeping a watching brief on situations where serious action in relation to a particular provider might be necessary, and they ensure that hon. Members will be aware of such situations where particular provision is in, or serves, their constituencies.
	We have reached a sensible position. We must retain the power to intervene through the LSC in extremis. We have listened and responded to concerns, and I hope that what we are now considering will command support across the House.

John Hayes: I thought long and hard about what to say this afternoon, and I was mindful of the fact that it is never wise to be too extravagant in victory. Equally, however, neither the House nor the Ministerand not even you, Madam Deputy Speakerwould expect my moment in the sun to be entirely fleeting.
	Benjamin Franklin said:
	You must not, when you have gained a victory, use any triumphing or insulting expression, nor show too much pleasure; but endeavour to console your adversary, and make him less dissatisfied with himself, by every kind and civil expression, that may be.
	To start in that vein, may I say that throughout the proceedings, the Minister has shown courtesy, diligence and a mind open to the suggestions put by the Opposition? We have had a continuing dialogue, which seems to have begun a long time ago. Indeed, the Bill began its passage early in the year, so this has been a long journey but a not entirely tortuous one; it has been more Three Men in a Boatat least, two men and a lady in a boatthan Heart of Darkness. It has not been a dreadful journey into the unknown, but a journey to a destination that is better than we feared when we embarked upon it.
	I shall say a few words about the details of the amendments before us. But first I must explain that we remain convinced that the Bill is a missed opportunity to implement the structural changes advocated by Lord Leitch. Of course the Minister knows that, and would expect me to repeat that view. However, we have reached a more desirable outcome than we might have done.
	In part, as the Minister has graciously acknowledged both today and on several previous occasions, that is because of the constructive opposition from the Conservatives and the other parties, which have also played a part in this process. It is also because of the work done in the other place, where a measured and well-informed debate about the Bill has taken place. I pay tribute to Baroness Morris of Bolton for the role that she has played in reminding the Minister that although the other place can, on occasion, be stubborn, it is so in the interests of what is right and appropriate. The House is at its best when Bills are improved by careful scrutiny and when the Opposition are listened to. Throughout the passage of the Bill, that has been the case.
	I shall not stray too far from the amendments, because you will not allow me to, Madam Deputy Speaker, but I want briefly to say that the proposals for foundation degrees have been improved because of the work that has been done across the Chamber on articulation agreements, taking account of the worries that universities have had about possible repercussions. We have reached a settlement on that, of which we can all be proud.
	The benefits of this constructive approach have been demonstrated again this afternoon in the form of the Government amendment. The original version of the Bill would have granted sweeping new powers to the Learning and Skills Council to intervene in further education colleges. I raised that on Second Reading with the then Secretary of State, who has now moved on to other thingsI will not say greater things. At that stage the Secretary of State said that he did not think that the powers would be used anyway, as they had not been used in their current form. We did not think that was good enough. Throughout Committee and in the other place we pressed Ministers to mitigate the powers, in the interests both of colleges and of proper parliamentary scrutiny and accountability.
	The response to those concerns finds form in the Government amendment. It will mean that to intervene, the LSC must have the express permission of the Secretary of State. That means that people in this House will be accountable for decisions made in that regardwe feared that, under the original form of the Bill, they might not have been. Moreover, the LSC will report annually on how its intervention powers have been used, and that report will be subject to appropriate scrutiny. Furthermore, the Minister has confirmed that at any stage during the process, if any individual feels that the powers have not been used reasonably or appropriately, the Secretary of State will be able to intervene and stop the processat its beginning, middle or end. That is, in effect, a right of appeal, and I felt that that was important.
	In addition, I am assured by the Minister in private discussions and in writing that the powers are not an extension of existing powers. There was a fear expressed in Committee and elsewhere that the new powers went wider than the current powers of the Secretary of State. The Minister assures me in his letter of 26 September that that is not the case. The provisions merely clarify the existing scope of powers that are in the hands of the Secretary of State. That is a great relief to colleges and others who felt that the provisions might be applied more widely to college managers and others, even college lecturers against whom people took a dislike. I understand that that was never the intention, but it was important that the Minister had the good grace and good sense to put that in writing. We end with an amendment that reassures those in the sector that this is not a plan to impose on them even more micro-management than already exists, which we resist today as we have always resisted it.
	We do not want to be too friendly; there must be some theatre and drama in our exchanges. People must know that there is a tangible difference between the Conservative approach to further education and that of the Government. So let me say now that we believe passionately in the independence of colleges. This will reassure colleges that these powers are not as draconian as they once seemed. It will also reassure hon. Members of all political parties that they have the opportunity to hold Ministers to account for the way in which these matters are dealt with. That second issue deserves just as much air time, because this House takes its responsibilities in those regards very seriously.
	Taken together, the amendments and the further written assurance of the Minister represent a significant change of direction. They mean, in effect, that the LSC will be unable to intervene without the approval of the Secretary of State. I am grateful to the Minister for his clarification. Finally I quote from his letter:
	the Bill does not empower the LSC to intervene in ways the Secretary of State cannot currently do...the LSC would not be able to direct a governing body for example to dismiss a senior post-holder.
	That assurance summarises and typifies the changes that have been made through the amendments.
	I know that my colleagues in this place welcome the amendments and the tone that the Minister has adopted in introducing them, and I anticipate, although I have no authority to insist on it, that my colleagues in the other place will take a similar view.

Paul Murphy: I rise to support the amendments, and to echo the words of my hon. Friend the Minister for Lifelong Learning, Further and Higher Education and of the hon. Member for South Holland and The Deepings (Mr. Hayes) about the constructive and thoughtful debates in which I and others have taken part both in the House and in Committee. We have probably had a little too much theatre in the House this week, and this debate encapsulates the other aspect of our work, which is, when appropriate, to hold sensible discussions and find agreement whatever our party.
	I shall briefly refer to the aspects of the amendments that deal with intervention in Wales and order-making powers for Welsh Ministers. From a Welsh point of view, the Bill has attracted much debate about the procedure for dealing with such amendments and other aspects of the Bill relating to Wales. I make two pleas to my hon. Friend the Minister. The first is to nurture the relationship between his Department and the Welsh Assembly Government. The Minister for Children, Education, Lifelong Learning and Skills, Jane Hutt, is a good Minister, and the relationship between the Assembly Government and the Westminster Government should be one of co-operation rather than confrontation.
	My second plea relates to the way in which the House deals with amendments that affect Wales. I am still not convinced that there is good enough scrutiny of such amendments. There is a role for Members of Parliament representing Wales, whether in Committee or on the Floor of the House, that has not yet been properly exploited, so I hope that in the Minister's discussions with the Secretary of State and the usual channels we can improve the methods whereby we scrutinise such amendments.
	There is another debate to be had about the fact that the political scene in Scotland and in Wales has changed dramaticallyand, thereby, the relationship between the Government, the Assembly and the Scottish Parliament. However, I would be a most unpopular man were I to pursue that subject at present.

Sarah Teather: I begin, as other Members have done, by thanking the Minister for the way he has worked through the Bill. I have sat through proceedings on many other Bills in which Ministers trenchantly dug in their heels on irrelevant points, so I pay tribute to his willingness to listen, clarify and amend at all stages, including in Committee. The Bill that left the Committee was a grand improvement on the measure that first came to us from the Lords and the amendments proposed today are a considerable move forward. I thank the Minister, too, for making his civil servants available for meetings to discuss the Bill and for attending such meetings himself.
	The Lords were right to reject the clause twice in its previous form. I was concerned that it allowed the Learning and Skills Councilan entirely undemocratic body subject to no form of parliamentary scrutinyto force a private institution to initiate dismissal proceedings against senior staff, even though the LSC may be but one of the bodies providing funding for the institution concerned. I had grave concerns about that, and I pay tribute to our colleagues in the other place for pressing the Government on the issue, so that we now have an amendment that is a considerable improvement.
	I continue to question the need for the clause, especially given the fact that the Secretary of State has never used the powers. However, we have moved a long way since the first draft of the provision, and that has met most of my concerns.
	The Minister did not address my principal concern in his opening speech, and I hope that he might clarify it in his winding-up remarks. As I said on Report, after the changes in the machinery of government, we expect the responsibility for funding 16-to-19 education to move to the Department for Children, Schools and Families and local authorities, rather than being channelled through the Learning and Skills Council. Therefore, the LSC will not be the funding body for an enormous number of colleges, so it would be an inappropriate regulator. It would be highly inappropriate to give the LSC the power to intervene in such a way.
	The Minister assured me in private that he was willing to make it clear on the record that further legislation would be needed when those changes took place. I hope that he will make it clear not only that further legislation will be needed to ensure that the LSC's powers do not transfer to another body but that those powers should not remain with the LSC. If the LSC is not funding colleges, it should not be the body regulating colleges either.
	The key move, which the Minister made clear, involves democratic accountability and parliamentary scrutiny, and the change in the Secretary of State's role in that respect is very welcome. The fact that the LSC must notify the Secretary of State of its actions and that the Secretary of State will be given the freedom to change and direct the LSC in a different way, with a loop involving MPs as well, provides the possibility of parliamentary scrutiny.
	I wonder whether the Minister will also place on record a point that he raised with me in private. He intends to use section 28(2) of the Learning and Skills Act 2000 to direct the LSC to include details of how it has used those powers in its annual report, thus ensuring not only that parliamentary scrutiny is available to MPs who have had the misfortune to see such powers used in their constituencies but that all MPs who have an interest in the issue can question the Secretary of State in his role as the accountable person in the House, where it is appropriate to do so.
	Finally, I am pleased that the Minister has placed on record the role of the Secretary of State for Children, Schools and Families. I wonder whether he might elaborate on that role. Presumably, the Secretary of State for Children, Schools and Families will become the relevant Secretary of State, once the machinery of government changes are implemented, but will that Secretary of State always be notified if the college involved does a substantial portion of its work in 16-to-19 education? What if all of its work is in the 16-to-19 area?
	I place it on record that I am grateful to the Minister for being willing to amend the clause. This issue has caused us great concern, rightly. I continue to have concerns about whether the clause is needed. However, as the Minister has moved so far, I shall certainly not oppose it today.

Bill Rammell: We have had a genuinely constructive debate, but I tell the hon. Member for South Holland and The Deepings (Mr. Hayes) that to talk of victory is going a tad far. A sensible intention on the part of the Government has been tightened through the scrutiny process. That, frankly, is how the House should operate. I pay due tribute to both Opposition Front Benchers for getting us to where we are today.
	I shall now pick up some of the specifics. In response to the point made by the hon. Member for Brent, East (Sarah Teather), if a change in the responsibility for further education were proposed, whatever it might be, legislation would be needed and there would be an opportunity for scrutiny. I place that on the record.
	To answer another point made by the hon. Lady, I am happy to make a commitment to the House that Ministers intend to use the Secretary of State's power under section 28(2) of the Learning and Skills Act 2000 to direct the LSC to include in its published annual report a statement summarising how it has used its intervention powers under proposed new section 56A. That would include, for example, the type of actions that had been taken, the reason for taking such actions and the outcomes. The form of the statement would be such that it was not possible to identify individual institutions where the fact of intervention was not in the public domain. Nevertheless, I think that that gives the hon. Lady the reassurance that she sought.

Jeremy Wright: I am conscious, as I know the Minister is, that this is a short debate. A number of points are dealt with in the helpful letter dated 26 September this year that he sent to my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes). Will the Minister consider placing a copy of that letter in the Library of the House so that all hon. Members are aware of the background to the helpful information that he has given us this afternoon?

Bill Rammell: I am more than happy to give that commitment. That will help in the understanding of the debate and the Bill that we are considering.
	I shall clarify some of the issues raised by the hon. Member for South Holland and The Deepings in relation to the steps that the LSC must take when it intervenes. The LSC must give prior notice. At that stage, the Secretary of State can take action, but does not have to do so on receipt of such a notice. It is correct that the Secretary of State has a greater opportunity to scrutinise the LSC as it takes that action and, if he chooses, to stop the LSC taking such action.
	On another point that the hon. Gentleman raised, the comparison of the current powers of the Secretary of State to intervene and the proposed powers for the LSC, I want to place it explicitly on the record that the Bill does not empower the LSC to intervene in ways that the Secretary of State cannot at present. Rather, it specifies that the power to give directions may include a direction to make collaboration arrangements. It also specifies that the LSC would not be able to direct a governing body to dismiss a senior postholder. Instead, it would be able to direct the governing body to initiate dismissal proceedings.
	The comments made by my right hon. Friend the Member for Torfaen (Mr. Murphy), the former Secretary of State for Wales, were exceedingly constructive. His point about nurturing the relationship between the Department for Innovation, Universities and Skills and the Welsh Assembly Government is important. Devolution does not mean divorce. There is a continuing need for co-operation and overlap. I entirely take his point about dialogue. The Under-Secretary of State for Innovation, Universities and Skills, my hon. Friend the Member for Tottenham (Mr. Lammy), has recently had discussions with Jane Hutt about some of these matters. My right hon. Friend's important point about the need for effective scrutiny will have been heard.
	On scrutiny in general, it is important to make it clear that the Bill has been subject to scrutiny and the role of Welsh Ministers has been scrutinised. With reference to the exercise of the powers of intervention, the Welsh Assembly Minister will be subject to scrutiny by the Welsh Assembly. The comments that were made have been extremely constructive and helpful.

John Hayes: First, it may be helpful to the House if the Minister comments on the ability of the Secretary of State to intervene if any of the parties feel that the intervention has been mishandled or inappropriate. The Minister deals with that in his letter to me, but it might be worth articulating it.
	Secondly, if the powers were transferred at a future point so some other bodywe do not know what the future of the LSC would bewould that require further legislation, as opposed to being done in a more slight and unsatisfactory way?

Bill Rammell: I thought that I had already made that clear, but I am happy to do so again. If there were changes in future, that would require legislation, which would be open to scrutiny. Will the hon. Gentleman remind me of his first point?

John Hayes: That is the trouble with making two points. In his letter to me, the Minister makes it clear that if the powers were exercised in a way which the parties concerned felt was inappropriate, or if the process of the exercise of the powers went wrong, the Secretary of State could at any point intervene to deal with the matter and draw it to a conclusion. We spoke about that at a meeting and it is confirmed in the hon. Gentleman's letter, but it would be useful to have it on the record in this place.

Bill Rammell: I am happy to confirm that the Secretary of State has the power to direct the process. If the notification comes from the Learning and Skills Council and if, as a result of his own judgment or as a result of representations, the Secretary of State is not happy for that intervention to proceed, he may stop it. That is an important commitment.
	To conclude, I should say that I think we have given reassurance. For the record, I reiterate that Ministers intend to use the power of the Secretary of State under section 28(2) of the Learning and Skills Act 2000 to direct the LSC to include in its published annual report a statement summarising how it has used its intervention powers. In answer to the point made by the hon. Member for South Holland and The Deepings, I should say that if future changes to the role, functions and structure of the LSC led to proposals to transfer the statutory intervention powers to another body, new legislation would be required to enact that transfer. The Bill does not empower the LSC to intervene in ways that the Secretary of State cannot currently. Ministers envisage that the LSC would use its powers to direct a governing body to initiate dismissal proceedings against a senior post holder other than the principal when wider intervention, which included possible dismissal of the principal, was also being considered. That important point has been raised with me before. We intend the power to be used to address unsatisfactory provision, not to decide who should hold a particular appointment in an institution.
	It is important that the House should be clear about such significant matters. In the spirit of our recent work, I hope that we can take forward the point on which the hon. Gentleman pressed me today. Specifically, he asked exactly what the Secretary of State could do if, on receipt of a notice from the LSC that it intended to exercise its statutory intervention powers, he had concerns. I have addressed that point already. However, for the record I say again that, on receipt of a notice of the sort that we propose, it would be open to the Secretary of State, if he was satisfied that the LSC's proposed intervention was not appropriate, to exercise his powers under proposed section 56C of the Further and Higher Education Act 1992 to direct the LSC on the exercise of its statutory intervention powers.
	Under section 25 of the 2000 Act, the Secretary of State could also direct the LSC not to act if he was satisfied that the LSC was proposing to act unreasonably in relation to its statutory powers or duties, or if it had failed to discharge a statutory duty. Any such direction by the Secretary of State might be as a result of any failure by the LSC to have regard to its most recently published statement of its intervention policy, so the issue would be framed within the context set out by the LSC. As I explained earlier, the Bill provides that the statement must be approved by the Secretary of State and that he must lay a copy of the approved statement before each House of Parliament. If the Secretary of State directed the LSC under proposed section 56C or section 25 of the 2000 Act, he would be accountable to the House for that decision.
	At the end of a constructive exchange, I hope that what I have said gives the reassurance hoped for by hon. Members of all parties. It should conclude proceedings on an important Bill that gives power, status and influence to our further education colleges so that they can continue the hugely important task that they face.
	 Question put and agreed to.
	 Amendments (a) to (f) agreed to.

CRIMINAL JUSTICE AND IMMIGRATION BILL (PROGRAMME) (NO. 2)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A (Programme motions),
	That the Order of 8th October 2007 (Criminal Justice and Immigration Bill (Programme)) be varied by the substitution in paragraph 2 (time for conclusion of proceedings in Public Bill Committee) for the words 'Tuesday 30th October 2007' of the words 'Thursday 29th November 2007'. [Mr.  Watts .]
	 Question agreed to.

Flooding (Gloucestershire)

Motion made, and Question proposed, That this House do now adjourn. [Mr. Watts.]

Laurence Robertson: I note that we have a little longer for this debate than might have been expected, but I assure the Minister that I do not intend to drag it out just for the sake of it. However, there are, of course, important issues to address, and I am pleased to have secured the debate for that reason. I thank Mr. Speaker for awarding it to me, and the Minister for attending today.
	My hon. Friends and colleagues from other seats in GloucestershireForest of Dean, Cheltenham, Gloucester, Stroud and Cotswoldhave all taken an interest in what I am discussing, although unfortunately they are not able to be here because of other pressures. They, too, have suffered in recent months, and I pay tribute to their work in fighting against the difficulties that we have experienced.
	I want to approach this debate in three parts. I want to consider what happened on 20 July and since, what is happening now and what should happen in the future. In June of this year, I remember visiting a number of people in my constituency and, by invitation, slightly beyond, to look at the difficulties they had experienced following floods in that month. I visited people who told me that they had lived in their properties for 40 years and never been flooded. There was some kind of warning there, I suppose. The storms were similar, although obviously those in July were a lot worse. There was a warning in June that there was a problem because places flooded that had never flooded before, and it was depressing to me to have to visit those people again in July, when they had been flooded for a second time.
	I suppose that 20 July started like any other day, but the rain came down very heavily. Perhaps it should not have, but it seemed to take us by surprise. The rain continued for a lot of the day, probably all of it, and people's journeys home became extremely difficult. A journey that should have taken me one hour took me four. The mobile phone network went down completely and it was impossible to phone home or make any arrangements. I was one of the lucky ones: many people did not get home at all. My house is not that far from the M5 motorway, and I know that people slept in their cars on the motorway, including police officers, who had no way of getting away from the situation. People slept in borough council offices, and some slept in public houses, which was probably the preferable option, but not one they would necessarily have chosen. It seemed to get worse.
	On the Saturday, there seemed to be a little respite, but water continued to come from the hills and down the rivers, and on Sunday, things got very much worse. As things progressed, the town of Tewkesbury got cut off and became an island, as probably the whole world knowsTewkesbury is now world famous for the wrong reasons. I have to stress that other parts of my constituency were also very badly flooded. Part of the hospital at Tewkesbury had to be evacuated, the doctor's surgery was flooded and had to be evacuated, meaning that the doctors were displaced, and many businesses were closed. Of course, many people had to leave their homes; some of them had to be rescued from their top floor. It was a desperate situation. When we lost the water supply, we had to live off water supplied by bowsersa word I had never come across before 20 Julyand the filling of bowsers and the delivery of bottled water became a major issue.  [ Interruption. ] I am glad to welcome the hon. Member for Stroud (Mr. Drew), who has managed to make it to the debate.
	Tragically, and worst of all, during the next few days, three people lost their lives as a direct result of the flooding; Bramwell and Christopher Lane, and Mitchell Taylor were all killed. That was extremely tragic, but it could have been so much worse. We lost our mains water supplysome people lost it for up to three weeksand as many as 350,000 properties were affected in this way. We very nearly lost our electricity supplies. It was estimated that up to 600,000 households could have lost electricity.
	At this point, I would like to congratulate the emergency services, particularly Gold Command, under the direction of Dr. Tim Brain, the chief constable of Gloucestershire. I would like to congratulate the armed forces, Tewkesbury borough council, parish councils and many othersparticularly those individuals who helped rescue people and deliver bottled water. It really brought out the very best in 99 per cent. of people. There were no divisions and no party politics; everybody made a tremendous effort. I personally knew many people who worked hard, but there were many others whom I did not know and whom I will probably not meet again.
	Perhaps unusually for a politician, I would like to congratulate the media on their role, especially Radio Gloucestershire, a local radio station, which broadcast accurate and up-to-date information every minute. That was extremely helpful. Perhaps unusually again for a politician, I would like to thank and congratulate the supermarkets and those who supplied the bottled water.
	Most hon. Members realise the importance of their staff. I want especially to congratulate my constituency assistant, Mark Calway, who worked night and day to try to help people with their problems. Far be it from me, as a Conservative Member of Parliament, to try to brighten up the Prime Minister's week, but I must thank him for what he did. He showed a great deal of interest and I am not prepared to play party politics about the matter. His many interventions were welcome. I also thank and congratulate the Secretary of State for Environment, Food and Rural Affairs and everybody at every level, including those in Cobra and Gold Command, who tried to help to alleviate the disaster. I am told that it was the biggest operation in peacetime Britain, and that is significant.

David Drew: I apologise for being late and leaving early. My hon. Friendin this contextknows that I am going to meet the rural advocate to discuss flooding. Does he agree that one of the problems was the apparent lack of knowledge about the susceptibility of the critical infrastructure, including the water treatment plant at Mythe and the sub-station at Walham? I appreciate that we discussed that yesterday in a Select Committee meeting with the Environment Agency, but some uncertainty remains about who takes the lead when those facilities are threatened. Does he agree that we need to determine how we protect those critical infrastructure facilities and who takes command when they are threatened?

Laurence Robertson: I am grateful for that intervention. The hon. Gentleman is absolutely right and has made one of the most important points. I shall deal with that a little later, but I emphasise that he is right.
	The second part of my speech is about the current position. Tewkesbury and the surrounding areas have recovered well but many people are still living in caravans on their own drives, and will do so for many months. In a discussion with the chief constable this morning, I was reminded that they will have to eat their Christmas dinner in caravans unless they are fortunate enough to be invited elsewhere. Many people remain displaced from their homes. Businesses, especially shops, pubs and restaurants, lost much business. When we lost the water supply, restaurants could not prepare food properly and consequently lost an awful lot of business. However, I want to convey the message that, although some people believe that Tewkesbury was like New Orleans, it was not that bad. Tewkesbury was not affected in quite the same way and it is open for business. I hope that I am allowed to make that plug.
	Of course, people have still got to get their houses back together and make insurance claims. The process of claiming appears to have gone fairly smoothlyI have not heard many complaints about italthough it took time for assessors and others to come out. Given the scale of the problem, that was understandable, but matters are progressing.
	Concern has been expressed about future insurance premiums and the future availability of insurance. I want to spend some time considering that because, yesterday, the Association of British Insurers made the worrying statement that it could not guarantee insuring people against flooding in future because of the Chancellor's statement the other day and the lack of money, as the association put it, from him for the alleviation of floods. I hope that the Chancellor will provide enough money to guard against future problems, and I want to discuss shortly some of the things that I hope will be done.
	I am also a little concerned about the ABI's position, although I do not want to be too much against it. I asked the ABI what specific schemes it felt would not be able to go ahead, because of the Government's position, that it felt should go ahead. Again, I am not defending the Government at all, but I was a bit concerned this morning to receive an e-mail from the ABI that in answeror non-answerto my question said:
	We do not have details of specific schemes that will now not go ahead.
	I am not defending the GovernmentI will say quite a few things that I want the Government to dobut I do not want the ABI to use the Government's position as a cop-out. That is not the ABI's role. Insurers take the premiums and they have to pay out. It will be difficult for people if they cannot get insurance. There might be some justifiable criticism of people or businesses who did not take out insurance, but if insurance is not available to them, that is a different proposition. I should like the Minister to address that concern.
	I come to part three of my speech: what do I think should happen in the future? We live on the confluence of two rivers in Tewkesbury. It is a beautiful place. We have the abbey and we have a lot going for us. The rivers brought a lot of trade in the past, but of course we recognise that Tewkesbury is on a floodplain and that the rivers flood frequently. The fields around Tewkesbury flood probably two, three or four times a year. That is not a problem; what is a problem is the kind of situation that we face currently.
	Although we accept that we live on a floodplain and that sometimes we will be flooded, people's primary concern now is that we should learn lessons from what happened. It is far too easy for the headlines to disappear, for people to forget about the situation and for nothing to happen. I hope that we will learn the lessons. I make no apology for returning to the fact that three people died in my constituency because of the flooding or that people beyond have suffered. We must learn the lessons. What do I think those lessons are? The biggest one is that we should not build houses or other buildings on or near floodplains. If we do that, the water obviously has nowhere to go or not as many places to go, whereas if the floodplain is a green field, the water can rest on it and eventually disappear. If there are buildings on that field, that cannot happen.
	One area of building in my constituency, in a place called Bredon Road, was part built and flooded. That was not a good calculation. In a written answer to my question number 146213, the Minister for Housing quoted planning policy statement 25, with regard to strategic flood risk assessments. That is welcome as far as it goes, but I do not think that it goes far enough. I know that the role of the Environment Agency has to some extent been strengthened on that pointI shall return to thatbut the provision does not go anywhere near far enough.
	I am also concerned about how we determine what constitutes a floodplain. When the Environment Secretary came to Tewkesbury he told me that the flooding that had occurred was far worse than the definitive map, which suggested where the flooding might take place if the 1947 floods were repeated. The flooding this time was worse. I had a meeting with somebody from the Environment Agency who suggested that if water lay beneath the surface of land, it was okay to build on. That is profoundly wrong and dangerous.
	There is currently an application, which will be with the Secretary of State any day now, at a village called Longford in my constituency, which is very close to Walham electric works, which almost flooded and which we almost lost. The appeal to the Secretary of State is by Hitchins and is to build some 600 houses on an area that floods and to which the access roads also flood. Surely that application must be turned down when it reaches the Secretary of State's office, otherwise we will have heard just empty words.

David Drew: I should like to associate myself with my hon. Friend's earlier remarks about all those whom he thanked. I should also like to thank the ministerial team, who played a significant role in keeping us informed. I entirely agree with the hon. Gentleman; the problem now is defining and redefining the floodplain, but also recognising the fact that where building is allowed can sometimes have an impact on other places further downstream. That is very worrying. I am sure that the hon. Gentleman would agree that, when an application is proposed, we need to look not only at the impact on the immediate area but at the impact further down the river, the brook or whatever.

Laurence Robertson: I thank the hon. Gentleman for making that point.
	There are areas of Tewkesbury, such as the Wheatpieces estate and the Stonehills estate, of which people said, Well, there you are, they didn't flood. It wasn't a problem. That misses the point entirely. The next estate, Priors Park estate, was very badly flooded. We are also losing gardens. Houses are being built on gardens, which are defined as brownfield sites, and that land loses the ability to soak up water.
	That raises the question of why so many houses are needed. I do not want to go through all the issues. We know about ageing populations, about couples separating, about people wanting more than one house, and about immigrationwe have had net immigration of well over a million in the past 10 years. All those factors put pressure on the housing situation, and we have to think about this very sensibly.
	Unbelievably, there are proposals from the regional spatial strategy in my constituency to build thousands of houses north of Gloucester and north of Cheltenham. That is asking for trouble, and the proposal must be rejected. We must find a better way forward, and better places to put the houses. We cannot build thousands of houses in the areas that have suffered so badly over the past few weeks.
	When we have to build houses, the builders should have a greater responsibility to ensure that the drainage system is adequate. In answer to my parliamentary question number 146214, the Minister helpfully replied but his answer was not strong enough. Things need tightening up. We also need to ensure that ditches and drains are cleared regularly, and that they are repaired when necessary. I had some displaced people living with me for a while; they were delightful. They lived much higher up than me, but their house, unlike mine, had flooded because their drains did not work. In fact, they had worked in reverse and thrown the water out into the property. I accept that that was an exceptional time, but in many cases, the drains were simply inadequate and the ditches were not cleaned.
	We need to draw up a list of priority people and priority buildings, so that we can help more quickly in times of difficulty. I went for a walkabout on the Sunday, and I came across some sheltered accommodation. Nobody had been there, and water was surrounding the buildings. It was coming up through the floors of the flats, and we had to push people out in their wheelchairs to avoid what could have been a terrible situation. We then had to wait for ambulances and police cars to arrive. This place was called Lanes Court in Priors Park, the estate that I mentioned earlier. Nobody had been round to check up on it; it had not registered on anyone's radar screen. There was no emergency relief for those people.
	I tabled a parliamentary question on that subjectquestion number 152885to which the Minister responded:
	Under central guidance on the requirements of the Civil Contingencies Act 2004, it is the responsibility of all the statutorily designated Category 1 responders, including local authorities, emergency services, Primary Care Trusts and the Environment Agency to identify and make plans to assist vulnerable people in any emergency.[ Official Report, 26 July 2007; Vol. 463, c. 1523W.]
	Well, in spite of what I am sure were the best efforts of all involved, that did not happen. It certainly did happen to some extent, but many people, such as those whom I have just mentioned, did not get rescued until they happened to be stumbled across. Many old and disabled people had bottled water brought to their houses, but that did not happen across the board. There were still many vulnerable people.
	The fire and rescue service made an absolutely tremendous effort, but I do not think that it was quite prepared for a disaster of this scale in terms of the number of its officers who have been trained to carry out rescue operations in water. Some are trained to do that and did an excellent job. Others also did an excellent job, but we need to reflect more on whether there are enough fire rescue officers trained in that particular line of service.
	I spoke to the chief constable of Gloucestershire this morning about the tri-service centre. It is a pity that the hon. Member for Stroud is no longer in his place, as I hoped that he would agree with me about it. On 20 July, the emergency services people were able to talk to each other immediately at the operational level. Nothing needed to be set up: they managed the emergency very well indeed and it would not have been as effective if it had had to be managed regionally. The local emergency people all knew the local council people, people from the utilities, MPs and so forth. It is interesting to note that when the merger of police forces was first discussed, relevant documents observed that a force as small as Gloucestershire's would not be able to handle an emergency on this scale. In fact, the force handled it very well indeed. I thus make a plea for the tri-service centre to be retained. It is working well and should be allowed to continue to do so.
	As to securing water and electricity supplies, which the hon. Member for Stroud mentioned, we have to ensure that the Mythe water works, located close to my home, is protected. We cannot allow hundreds of thousands of people to lose their drinking water again. In respect of the Walham electricity worksone sub-station apparently serves 600,000it cannot be right to put people into such a vulnerable position. I understand that Hesco bastions, which are protective borders, have been put around the Mythe works on a temporary basis, with the possibility of them becoming permanent, but I have to say that this is not rocket science. It should be simple to provide those protections, which must become permanent at Mythe, Walham and elsewhere.
	We also need to secure a network of alternative supplies. It is strange that so many people who could lose their water supplies are dependent on just one service or one water treatment plant. When the Prime Minister went there during the crisis, his first remarks were something like, This is rather an old building or an old service station, isn't it? Well, he had a good point. The plant usually works very well and the people employed there work hard, but so many people's water should not be dependent on one particular water treatment plant and the same applies to electricity.
	I want to touch on the role of Severn Trent. It is perhaps understandable that it was totally overwhelmed by what happened. However, it operatesI suppose inevitablyas a monopoly, so it is in a different position. People cannot choose to go elsewhere for their water. A great deal of anger was directed at Severn Trent: some of it may not have been justified, but I can certainly understand quite a lot of it. I suggest that Severn Trent should be more a part of the community and should update its emergency planning. There was a tremendous effort in Tewkesbury to get bowsers and bottles of water to everybody. I believe that we ended up with most of the available bowsers in the country, so what would have happened if there had been a similar emergency somewhere else in the country? All the water companies need to be aware of what can happen and ensure that they can respond to these situations more strongly if they occur again.
	I come on to the Environment Agency. Some years ago, the Environment Agency was monitoring a chemical treatment plant, operated by Cleansing Service Group and based in Sandhurst in my constituency. It was watching it so closely that the whole thing blew up one day and it simply did not carry out its job properly. I have many criticisms of the Environment Agency and I shall run through a few issues that are linked to it. If they are not currently its responsibility, perhaps they should be.
	I have already mentioned drainage, but I want to touch on the responsibility for brooks, rivers, waterways and drains. In answer to my parliamentary question 148307, the Minister said:
	Drainage is a complex issue and responsibility rests with water and sewerage companies, the Environment Agency, local authorities and private owners.[ Official Report, 16 July 2007; Vol. 463, c. 9W.]
	It is too complicatedtoo many issues fall between two stools. The responsibility needs to be clearly defined.
	The Environment Agency has become a statutory consultee in planning applications. That is not strong enough. It needs to have a much greater say in whether certain planning applications are granted. It needs a better and faster warning system: the Environment Agency claims to have warned many thousands of people, but many people were not warned about what was coming. Farmers were particularly affected, and while I pay tribute to the Royal Society for the Prevention of Cruelty to Animals and the National Farmers Union for their excellent work in getting water to many livestock, there was a big problem with the warning system, which needs to be examined.
	Spending on specific national flood defence projects is necessary, but individual flood defences also need to be up to scratch. The Environment Agency needs more responsibility, more powers, adequate funding and more confidence to sort out problems, or else it needs scrapping. As it stands, it serves no useful purpose; we cannot leave it as it is.
	We heard a lot about the weather that led to such problems being unprecedented. I shall steal a phrase from the chief constable of GloucestershireI warned him that I wouldwho was the head of Gold Command. He said that if such weather happens again, it will not be unprecedented; we will have gone through it before, in July this year. I am glad to welcome to the Chamber the hon. Member for Forest of Dean (Mr. Harper), who also suffered and worked hard during these difficulties. I thank him for offering to help me out when it was difficult for me to be in three or four places at once.
	The weather might have been unprecedented this time, but if it happens again, it will not be unprecedented. It might have been a once-in-150-years event. We are told that the effects of climate change will be severe, so we cannot take the view that it will not happen for another 150 years. Heaven forbid, it could happen tomorrow, next week, next month or next yearperhaps it will not happen for another 150 years, but we simply cannot take the chance.
	As we know, Tewkesbury is an area that will flood, but let us not make it worse than it needs to be. Let us do everything that we can to lessen and mitigate the damage of any future heavy rainfall. More than anything, people who have suffered, and are still suffering, want to see lessons learned. Please let us learn those lessons.

Madam Deputy Speaker: Order. Owing to an administrative error, a petition from the hon. Member for City of York (Hugh Bayley) was not called before the Adjournment was moved. In the light of the time available, I am prepared to call him to present his petition now.

PETITION

Police (North Yorkshire)

Hugh Bayley: I am most grateful to you, Madam Deputy Speaker, for using the rules in a constructive way to allow me to present this petition this evening.
	The petition is from my constituent, Mr. Jeremy Small, who is a journalist. The petition concerns the North Yorkshire police budget. The petition, run by Mr. Small's newspaper, the  York Press, has been signed by 1,000 residents of York and North Yorkshire . I shall present those signatures to the Home Secretary, who has kindly agreed to meet me to discuss the issue.
	The petition states:
	To the House of Commons
	The Petition of Mr. Jeremy Small
	Declares its concern that the Home Office may reduce its grant to the North Yorkshire Police Force.
	The Petitioners therefore request that the House of Commons urges the Home Secretary to abandon any plans to reduce the grant and to retain adequate funding for the county's police force to keep crime levels down.
	And the Petitioners remain, etc.
	 To lie upon the Table.

FLOODING (GLOUCESTERSHIRE)

Motion made, and Question again proposed, That this House do now adjourn. [Mr. Watts.]

Mark Harper: Thank you for your indulgence, Madam Deputy Speaker. I will be very brief. As I suspect that my hon. Friend the Member for Tewkesbury (Mr. Robertson) has covered a number of the matters that I shall raise, I beg your forgiveness if I am repetitive. I apologise for not being present at the start of the debate; I was serving on a Public Bill Committee.
	Given that a number of my constituents were affected by the flooding, I want to record my thanks to all the emergency services, and the armed forces, for the tremendous work that they did. I know my hon. Friend agrees that although the loss of life was tragic for the families and individuals directly concerned, we have the emergency services to thank for the fact that it was not very much greater. The way in which our emergency services in Gloucestershire, with Gold Command based at the tri-service centre, worked so closely together demonstrated the success of that model, and I hope that the lessons learned inquiry will make recommendations to the Government that will make them think again about the attempt to regionalise fire control.
	Those of us whose constituencies were affected by the flooding welcomed the fact that Ministers were responsive throughout the recess and kept Members properly informed. We were able to question them on what was going on, which gave us a valuable opportunity to raise issues and secure action on a number of matters that affected us locally. I also thank Ministers for the 10 million that they have given Gloucestershire county council to help with the repair of roads that were damaged across the countybut having thanked the Minister for the down-payment, I should remind him that another 17 million is needed for further repairs. I know that his colleagues in the Department for Transport are working with officials from the county council to settle the details, and I hope that the money will be forthcoming.
	I want to make two more points. The first concerns council tax. I am aware that the Department has provided money for a number of the authorities concerned. Tewkesbury borough council, part of which covers my constituency, has used the money very quickly. Much of it has been used directly to help constituents and to defray some of the cost. The Minister might consider encouraging the Valuation Office Agency to be as flexible as possible where constituents have suffered property damage.
	A case in my constituency is being examined, and I hope that the right decision will be made. My constituents have been unable to live in their main residence, but because they are occupying a caravan on the site they are having to pay the full council tax on the property. That is clearly not appropriate. To be fair to the Minister, I should add that the Valuation Office Agency is considering the case. I hope that it will be able to observe the state of the property, and will charge the appropriate council tax for occupation of the caravan. I know that Ministers have been flexible when such issues have arisen in the past, and I hope that they will be so in this instance.
	I raise my second point not necessarily in expectation of action in a specific case, but in the hope that Ministers may, as part of their response to the lessons learned inquiry, consider the rules governing utility companies and loss of water supply. In Gloucestershire a number of residents across the county were without mains water for a significant period. Because of the exceptional nature of the event, it has been decided that the compensation scheme, which would normally require Severn Trent Water to compensate both domestic and business users for the loss of their supply, will not take effect. Severn Trent Water has made a payment to local authorities in lieu of that, but it will not surprise the Minister to find out that that amount is significantly less than what would have been due under the scheme. It may be worth looking at whether it is appropriate that the compensation scheme does not operate in a case where a significant number of consumers have been affected.
	To add insult to injury, Severn Trent Water is not even considering not charging them for water supply during the period for which they were without water. Constituents will have to pay their full annual bill. For a significant period, they were greatly inconvenienced. They would welcome the Government looking again at that matter.
	Thank you, Madam Deputy Speaker, for the opportunity to raise those issues and to put those concerns on the record. I look forward to hearing what the Minister says in reply.

Phil Woolas: It is extremely appropriate that we have this Adjournment debate in the first week of the return of Parliament. The last Adjournment debate before the summer recess was on flooding. I was grateful to Mr. Speaker for the opportunity to reply to that debate. I want to put a few, I hope, serious points on the record.
	I congratulate the hon. Member for Tewkesbury (Mr. Robertson) and I want to thank him, because my experience throughout the summer, during the many meetings, telephone conference calls and visits, and in reading letters and other correspondence, was that he acted with due diligence on behalf of his constituents. He criticised the Government or the authorities when it was helpful to his constituents and not when it was only helpful to him. He asked for what we could give him but did not ask for things that we could not give him. He behaved as an entirely responsible Member. If I were his constituent, I would be very proud of him. I would not say that I would vote for him, because that would bring party politics into it, but the serious point is that I would like to put that on the record. It says in  Dod's  Parliamentary Companion that the hon. Gentleman has run six marathons. He must be a Lancastrian to have such stamina. I seriously congratulate him on the role that he played.
	I said in the Adjournment debate in Westminster Hall that, if ever there was proof of the case for single Member constituency Members of Parliament, it was the flooding events recently. Members of Parliament for constituencies across the political spectrum throughout our country were able to solve problems on behalf of their constituents. I hope that Ministers were able to play their part, too.
	The Minister for Local Government was appointed as the Minister with responsibility for flood recovery in circumstances that would have made the late Lord Howell proud. He has done a sterling job. He has ensured that the flood recovery effort has carried on. Indeed, I think that we have had seven ministerial meetings, the latest of which was yesterday. Officials and Ministers from across the Whitehall Departments met, long after the national media, although not the local media, had lost interest. I thank also the flood recovery officials group, or FROGa horrible acronym. It has been working very hard throughout the period; it is still working hard now.
	I pay tribute also to the hon. Member for Forest of Dean (Mr. Harper). May I, perhaps unusually, answer his points first, because that will form the unscripted bit of my reply? I hope that the hon. Member for Tewkesbury and indeed my hon. Friend the Member for Watford (Claire Ward), the Whip, will allow me to do that, because we have a bit more time than we would otherwise have had.
	The hon. Member for Forest of Dean makes the point about Gold Command, and he is right. Built into the Civil Contingencies Act 2004 is the philosophy of lessons learned. Part of the approach of the professionals is always to ask for criticism, in order that they can learn from individual circumstances. It has been the endeavour of the Government that support for the civil contingencies procedure should be all-party, which is why we involve Opposition spokespersons in the briefings and so on. It does not work without public resilience and therefore requires an all-party approach.
	The Gold Command structure is, on the whole, working. The experience from the floods in June and July was that we were a lot better off with that structure than we would have been without it. That is not to say that we cannot learn lessons, as the hon. Member for Forest of Dean says. I hope that we will be able to persuade him of the virtue of the regional fire control centres. As he knows, 999 is regional already and the idea of the regional centres is to make improvements. The co-ordination of kit and equipmentin this instance, in the floods and at other incidents such as Buncefieldhas been made better by the regional control centres. I hope that he will be persuaded over the months of the benefits of that.
	The hon. Gentleman was gracious enough to thank Ministers for their involvement, and I thank him for that. On the question of money, he again graciously acknowledged the allocation so far. The Minister for Local Government has been incredibly diligent in his approach and is leading the UK request to the EU solidarity fund. We also have the Bellwin schemecreated, I think, by Lord Bellwin. He is the only Minister to have anything complimentary named after him.
	The hon. Gentleman made an interesting point about the Valuation Office Agency. That matter came up in one of the conferences with MPs and I shall take it up. If someone is living in a caravan in their own grounds and being charged when they would not be if they were living in a caravan not on their own grounds, that suggests that the hon. GentlemanI am anxious not to make commitments that I cannot fulfilhas a point. The loss of water supplywe discussed that yesterdayis an ongoing issue.
	The Minister for Local Government, the Secretary of State and other Ministers including myself visited many areas across the country during the unprecedented flooding and saw for ourselves how destructive, distressing and, on many occasions, frightening the flooding has been. The debate gives me the opportunity to echo the words of the hon. Member for Forest of Dean in praising the magnificent response of those affected. No civil resilience planning works without public resilience, which means that having confidence in the authorities is essential.
	There are many stories and they will be documented over the years, but I want to put our appreciation on the record. I include in that the utility companies, which have been criticised but whose individual employees went the extra mile, as has been acknowledged. We know that the recovery from the impact of flooding is long and arduous and continues long after the media news reports have finished. I would like to thank BBC local radioI know that the Secretary of State has done so on record with the BBCas well as commercial radio, which played an important role. Their compilation of reports was hugely important in giving information, not just in reporting news.
	The good news is that the comprehensive funding package of up to 57 million to assist flood-affected regions and to help those in greatest need, including funding for schools, transport and businesses, has been put in place. Over 2.5 million of flood recovery money has been provided to Gloucestershire and we have given local authorities the flexibility to decide what to do with that money based on local circumstances. That is almost as important as the amount of money given.
	In addition, Gloucestershire will be given at least 10 million for highways works and more than 1 million for schools and children's services affected by the floods. The South West of England Regional Development Agency also has a business recovery scheme. Grants of up to 2,500 are available to small and medium-sized enterprises, and, to date, almost 1m in grants has been allocated to businesses. The generosity of the public and businesses must also be acknowledged; I understand that they have so far donated almost 800,000 to the Gloucestershire flood relief fund, which will help those who have suffered hardship as a result of flooding.
	My hon. Friend the Minister for Local Government is leading a co-ordinated effort across Government to ensure that we do as much as we can to assist those in the flooded areas. Our message is that they are not forgotten. A meeting yesterday to look in detail at the problems was attended by officials of more than 25 Departments and agencies, and we continue that work.
	Let me repeat the point about the exceptional weather. Rainfall in the constituency of the hon. Member for Tewkesbury was the highest since records began in 1766. The flood warning I received in my ministerial box the evening before warned of severe floods in central and southern England, but it is simply not possible to give warnings of conditions of the severity that his constituency sufferedwhich created dangerous circumstances and, tragically, resulted in loss of life.
	Measures are required to respond to and manage sudden increases in water flow: putting in place defences and better drainage; warning of flooding before it happens so people can prepare; and reacting quickly and effectively when it does occur, as it inevitably will from time to time, and our water management infrastructure is overwhelmed beyond its design capacity. We must also have procedures in place to minimise distress, to avoid injury and loss of life, to provide immediate rescue services and help for those whose homes have been made uninhabitable, and to maintain essential services. We witnessed in Gloucestershire the enormous effort people made to operate those procedures successfully.
	In the longer term, we must look at how we can avoid making the problem worse, especially given the impact climate change will have in terms of rainfall levels and increasing the frequency and intensity of downpours. It is not possible to say that there was a direct causal link between climate change and the events in July in the hon. Gentleman's constituency, but it is highly likely that there was a connection, and the case for climate change is provenas, incidentally, the judge in the recent Al Gore film case recognised.
	Physical defences will continue to be the most important mechanism that we have for protecting lives and property from the risks of flooding and erosion, but we recognise that building bigger and ever higher is not sustainable. Our cross-Government Making Space for Water strategy development programme is looking not only at how we optimise flood management spend, but at other ways in which we can take an in-the-round and sustainable approach to the management of risk from all forms of floodingfrom rivers, the sea, groundwater, surface run-off and sewers. We are looking at, and delivering, a broad range of management measures.
	We are aiming to improve management of the risk nationally by giving the Environment Agency a strategic overview of all forms of flooding in close partnership with local authorities, the water companies and other bodies. The hon. Gentleman made a point about co-ordination. The point is to have co-ordination, rather than the ideaI am not saying that he suggested thisthat we give all control and ownership of the problem to one authority. We think better co-ordination is needed.
	We shall look at the review that is being carried out by Sir Michael Pitt. Although I was not involved in his appointment, I could not have chosen a better person to carry out that review for us, and I am sure that co-ordination is one of the things that he is examining.

Laurence Robertson: I thank the Minister for his generous remarks earlier, which are very much appreciated. On the investigation being carried out by Sir Michael Pitt, will he be able to meet all Gloucestershire Members of Parliament, individually if necessary? The Minister will be aware of the difficulties of getting six Members of Parliament together when it also suits Sir Michael's diary. He is visiting Gloucestershire next week, when a number of us will not be available to meet him, and it is important that we have a chance to talk to him about the situation.

Phil Woolas: If Sir Michael cannot do so, I will listen to the individual Members of Parliament. I will raise this matter with him, and I know that he will be diligent.
	The fact that Members of Parliament raised issues with Ministers, whether we are talking about my hon. Friend the Member for Bassetlaw (John Mann) and the Trent basin or the hon. Gentleman and the Severn basin and elsewhere in the country, benefited constituents. Not only were Members able to bring issues of huge importance straight to Ministers' attention, but, more importantly, the team of officialsthrough the Gold Command structure immediately and through the recovery effort latterlywas able to hear the articulation of people's frustrations on a range of issues directly from the areas. I was proud of our parliamentary system when that kicked in and did so in a completely non-partisan way.
	The answer to the hon. Gentleman's question is that I shall urge that the approach he spoke of will be taken. If it is not, and probably in any case, we shall want to act at parliamentary level.
	We have increased the funding significantly in recent years. I hope that hon. Members welcomed the Secretary of State's announcement that funding for flood defences will increase to 800 million in 2010-11. We are also working with the Environment Agency to develop a long-term investment strategy, to build on the one that we already have, for river and coastal flood-risk management, looking ahead over the next 20 years to deliver those objectives.
	The hon. Gentleman raised an important point about insurance. I was disappointed to read the comments of the Association of British Insurers earlier in the week. The amount of money spent on flood defences is never enoughI say that openly, although I know that I will be misquoted in certain parts of the media. How does one know how much to spend? One takes a risk assessment, just as insurance companies do. The Government have increased significantly the amount of money that they are spending, but, as the Environment Agency is the first to point out, the lead-in times on projects can be significant. The projects cannot be turned on and off, like waterI hope that you will pardon the pun, Mr. Deputy Speaker.
	We think that our work with the ABI is constructive, and I know that it reciprocates that view. I assure hon. Members that we have found from our meetings that our shared commitment to the statement of principles that we have with it is secure. There has been no reason to think that insurance will not be available and that the statement of principles will be breached. My understanding is that insurers will use their best efforts to provide flood cover, and will work with customers who take measures to allow insurance to continue, even where they may not be covered by the statement of principles. I hope that I can reassure the hon. Gentleman's constituents that they will be able to carry on getting insurance, and that we are committed to that statement of principles.
	I have used more time than I would normally be allowed, so I shall draw my remarks to a conclusion. I have not used this debate to make a comprehensive statement of the Government's policy on flood defences; I would take more than the time that I could use, were I to do so.
	The hon. Gentleman talked about the critical infrastructure. Clearly, we have to re-examine the defences against flooding. In critical infrastructure we need to include not just the utilities, but some infrastructure that may not be obvious, such as communications infrastructure. I look to Sir Michael's report on that point. The hon. Gentleman did not suggest that the matter was simple, but let me say that it is not as simple as putting a barrier around a sub-station. As all of us who witnessed the floods know, drainage and the drain system are critical. Often the most dangerous aspect of flooding is the impact that is has on drains. While pumping out from the drains, one is also trying to stop the water coming in. That is true of critical infrastructure. It was the case at Walham. Water treatment works are often, by definition, at the most vulnerable points in the river basin. That is why they are where they are. The hon. Gentleman knows the geography of the Severn basin better than I do, but simply looking at a map shows why it is where it is.
	The hon. Gentleman made an important point about bowsers and the co-ordination between utility companies. We need to redouble our efforts to ensure that we have provision there, should it be neededmay goodness forbid it. From the information that I have, I am confident that that worked well, but it could always go horribly wrong. I invite the hon. Gentleman to take part in the review that Sir Michael is undertaking, which I know will be approached consistently.
	Through the opportunity of this Adjournment debate, I wish to reassure the hon. Gentleman's constituents that the Government and their agencies have not taken their eye off the ball, but are aware that the problems are ongoing. That is as true in east Yorkshire, south Yorkshire and the east midlands as in his region. We hope that we can continue to work constructively to alleviate the devastation that his constituents suffered.
	 Question put and agreed to.
	 Adjourned accordingly at eight minutes to Five o'clock.